A swap
A) obligates two counterparties to exchange cash flows at one or more future dates.
B) allows participants to restructure their balance sheets.
C) allows a firm to convert outstanding fixed rate debt to floating rate debt.
D) obligates two counterparties to exchange cash flows at one or more future dates and allows participants to restructure their balance sheets.
E) All of the options are correct.

Question

Quizplus · Accepted Answer

Swaps are financial instruments that allow two parties to exchange cash flows at future dates, which can be used for various purposes including restructuring balance sheets and converting debt from fixed to floating rates, making all the provided options correct.

A Swap