The most common type of interest-rate swap is
A)the plain vanilla swap.
B)the basic swap.
C)the ordinary swap.
D)the notional swap.

Question

Quizplus · Accepted Answer

The most common type of interest-rate swap is the plain vanilla swap. This type of swap involves exchanging fixed-rate payments for floating-rate payments, typically based on a benchmark such as LIBOR. It is considered the "basic" or "ordinary" type of swap and allows counterparties to manage interest-rate risk. The other answer choices (B, C, and D) do not accurately describe a type of interest-rate swap.

The Most Common Type of Interest-Rate Swap Is