A shortcoming of swaps that has led to the participation of large firms and financial institutions is
A)the lack of privacy.
B)need to assess creditworthiness.
C)desire for more flexibility.
D)limited size of the market.

Question

Quizplus · Accepted Answer

Assessing creditworthiness is a complicated process that requires large amounts of information and expertise. This has made it difficult for small firms and individuals to participate in the swaps market. However, large firms and financial institutions have the resources and expertise necessary to engage in these transactions, which has helped drive the growth of the market. Therefore, the need to assess creditworthiness is a disadvantage of swaps that has led to the participation of large firms and financial institutions.

A Shortcoming of Swaps That Has Led to the Participation