What is the special feature of an off-market swap arrangement?
A)It involves special nonstandard considerations that must be negotiated between the parties.
B)The swap is used to hedge against exchange rate risk from mismatched currencies on assets and liabilities.
C)It involves additional financing costs resulting from the fixed-fixed currency swap.
D)It involves an obligation to pay interest at a fixed or floating rate for payments representing the total return on a specified amount.
E)FI receives the par value of the loan on default in return for paying a periodic swap fee.

Question

Quizplus · Accepted Answer

An off-market swap arrangement is a customized agreement between two parties that may require nonstandard considerations, such as unique terms or structures that must be negotiated between the parties. This is in contrast to a standard swap, which has predetermined terms and may be traded on a public exchange.

What Is the Special Feature of an Off-Market Swap Arrangement