Which of the following statements is true?
A)Total return swaps are typically structured in a way that any capital gains or losses are paid at the end of the swap and alternative arrangements do not exist.
B)Total return swaps are typically structured in a way that any capital gains or losses are paid at the end of the swap, but alternative arrangements exist.
C)Pure credit swaps are typically structured in a way that any capital gains or losses are paid at the end of the swap and alternative arrangements do not exist.
D)Pure credit swaps are typically structured in a way that any capital gains or losses are paid at the end of the swap, but alternative arrangements exist.

Question

Quizplus · Accepted Answer

Total return swaps are typically structured in a way that any capital gains or losses are paid at the end of the swap, but alternative arrangements such as periodic payments may also be possible. On the other hand, pure credit swaps do not involve capital gains or losses, as they only involve the exchange of cash flows based on the interest rate or credit risk of the underlying security or index.

Which of the Following Statements Is True