Interest rate swaps:

Question

Quizplus · Accepted Answer

Interest rate swaps allow parties to exchange fixed and floating interest rates, which can change their exposure to interest-rate fluctuations. This makes A the correct choice. B is incorrect because swaps were first introduced in the 1980s, making them relatively new compared to other financial instruments. C is incorrect because currency swaps are a separate type of financial derivative that allows for the exchange of currencies, not interest rates. D is incorrect because swaps are highly customizable, making them flexible and adaptable to the needs of the parties involved.

Interest Rate Swaps