Which of the following distinguishes equity swaps from currency swaps?
A)equity swap payments are always hedged
B)equity swap payments are made on the first day of the month
C)equity swap payments can be negative
D)equity swap payments have more credit risk
E)none of the above

Question

Quizplus · Accepted Answer

Equity swap payments can be negative, meaning one party may owe the other party money. In currency swaps, payments are always positive (i.e. they involve exchanging fixed interest payments in one currency for fixed interest payments in another currency). The other options do not distinguish equity swaps from currency swaps.

Which of the Following Distinguishes Equity Swaps from Currency Swaps