Because interest rate swaps are off-balance-sheet transactions for an intermediary,they:
A) only involve receiving deposits.
B) only involve lending funds.
C) are not involved in capital adequacy requirements.
D) are involved in capital adequacy requirements.

Question

Quizplus · Accepted Answer

Interest rate swaps are off-balance-sheet transactions for an intermediary, meaning they do not appear on the balance sheet of the intermediary. As a result, they are not involved in capital adequacy requirements, which are regulations that set minimum capital levels for banks and other financial institutions.

Because Interest Rate Swaps Are Off-Balance-Sheet Transactions for an Intermediary,they