Swaps differ from futures and options in all of the following ways EXCEPT
A) swaps are intended to reduce the risk faced by participants.
B) swaps have more flexibility.
C) swaps have more privacy.
D) swaps have less regulation.

Question

Quizplus · Accepted Answer

Swaps, like futures and options, are used as a risk management tool to hedge against fluctuations in variables such as interest rates, currency exchange rates, and commodity prices. All three financial instruments serve the purpose of reducing risk for participants, although they operate in different ways and have different structures.

Swaps Differ from Futures and Options in All of the Following