Interest rate swaps involve a contract between two parties who agree to:
A) exchange the bonds but keep the interest payments
B) exchange the interest payments but keep the bonds .
C) exchange both the interest payments and the bonds.
D) have an option to acquire either the interest payments or the bonds.

Question

Quizplus · Accepted Answer

Interest rate swaps involve a contract where two parties agree to exchange interest payments based on a specified principal amount, while each party keeps their original bond. This allows them to hedge against interest rate changes or to speculate.

Interest Rate Swaps Involve a Contract Between Two Parties Who