When a swap bank serves as a broker,
A)the swap bank stands willing to accept either side of a swap.
B)the swap bank matches counterparties but does not assume any risk of the swap.
C)the swap bank receives a commission for matching buyers and sellers.
D)none of the options

Question

Quizplus · Accepted Answer

When a swap bank serves as a broker, it matches counterparties but does not assume any risk of the swap. The swap bank receives a commission for its role in matching buyers and sellers but does not take on any exposure to the terms of the swap. Therefore, option B is the correct choice. Option A is incorrect because the swap bank would only accept one side of the swap, not both. Option C is partially correct but does not capture the full nature of a swap broker's role. Option D is incorrect as there is a correct option for this question.

When a Swap Bank Serves as a Broker