In relation to an interest rate swap transaction when the two parties are each entering into a swap to manage a particular interest rate risk exposure,this is called a:
A) bank swap.
B) direct swap.
C) intermediated swap.
D) credit swap.

Question

Quizplus · Accepted Answer

A direct swap is when the two parties directly enter into an interest rate swap transaction to manage their respective interest rate risk exposures, without the involvement of intermediaries such as banks. A bank swap involves a bank acting as an intermediary between the two parties, while an intermediated swap may involve other types of intermediaries such as brokers or dealers. A credit swap is a type of derivative that allows one party to transfer the credit risk of a particular asset or obligation to another party.

In Relation to an Interest Rate Swap Transaction When the Two