24-45 A swap that technically is a succession of forward contracts on interest rates is
A)a commodity swap.
B)a credit swap.
C)a currency swap.
D)an equity swap.
E)an interest rate swap.

Question

Quizplus · Accepted Answer

An interest rate swap involves swapping interest rate payment streams between two parties. It is a succession of forward contracts on interest rates, making it the only logical choice for this question. A commodity swap involves exchanging cash flows based on the price of a commodity, a credit swap involves the transfer of credit risk between parties, a currency swap involves exchanging cash flows in different currencies, and an equity swap involves exchanging cash flows based on the performance of a stock or stock index.

24-45 a Swap That Technically Is a Succession of Forward