Which of the following is not a way to terminate a swap:
A)the two counterparties cash settle the market value
B)enter into an opposite swap with another counterparty
C)hold the swap to its maturity date
D)use a forward contract or option on the swap to enter into an offsetting swap
E)borrow the notional principal and pay off the counterparty

Question

Quizplus · Accepted Answer

Borrowing the notional principal and paying off the counterparty is not a recognized method to terminate a swap. The other options involve either settling the swap or offsetting it through financial instruments.

Which of the Following Is Not a Way to Terminate