An interest rate swap is:
A) another name for a call option.
B) another name for a put option.
C) an agreement between two or more persons to exchange cash flows over some future period.
D) the name for the exchange of a bond futures contract for an option contract.

Question

Quizplus · Accepted Answer

An interest rate swap is an agreement between two or more persons to exchange cash flows over some future period. It involves exchanging one type of interest rate payments, such as a fixed rate, for another type, such as a floating rate. It is not related to options or bond futures contracts.

An Interest Rate Swap Is