A swap is
A)another name for a put option.
B)another name for a call option.
C)an agreement between two or more persons to exchange sets of cash flows over some future period.
D)the name for the replacement of a futures contract by an options contract.

Question

Quizplus · Accepted Answer

A swap is an agreement between two or more parties to exchange sets of cash flows over a period of time. It can involve exchanging fixed interest payments for floating interest payments, swapping currencies or even swapping different types of cash flows such as electricity prices or commodities. Swaps are often used in finance to manage risk or to speculate on market movements. They are not another name for put or call options, and the replacement of a futures contract with an options contract is not referred to as a swap.

A Swap Is