Which of the following is a disadvantage of an interest rate swap agreement?

Question

Quizplus · Accepted Answer

All of the options are potential disadvantages of interest rate swap agreements. Basis risk arises from differences in the floating rates being swapped, brokerage fees could be high depending on the broker used, default risk exists if one party is unable to fulfill their obligations, and interest rate risk could negatively impact the effectiveness of the swap agreement.

Which of the Following Is a Disadvantage of an Interest