A swap is an agreement between two parties to exchange assets or cash flows for a specific period of time at a specified interval. Swaps can involve interest rates, currencies, commodities, and other financial instruments. These are commonly used by companies to manage their risks or to speculate on market movements.

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What Is a Swap

Question 92

Multiple Choice

What is a swap?

A) An agreement between two parties to exchange assets or a series of cash flows for a specific period of time at a specified interval.
B) An agreement between a buyer and a seller at time 0 to exchange a nonstandardized asset for cash at some future date.
C) A contract that gives the holder the right,but not the obligation to buy or sell the underlying asset at a specified price within a specified period of time.
D) Trading in securities prior to their actual issue.

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