Swaps are primarily of value because they permit firms to
A)tap new capital markets
B)reduce risks
C)reduce taxes
D)a and b only

Question

Quizplus · Accepted Answer

Swaps are primarily used by firms to reduce risks associated with certain financial instruments, such as interest rates or foreign currency exchange rates. Additionally, swaps can provide access to new capital markets. Therefore, the correct choice is D, as both options (a and b) are true. Swaps are not generally used to reduce taxes.

Swaps Are Primarily of Value Because They Permit Firms to