Swap contracts are risk-transfer instruments that are used to manage risk arising from:
A)the payments system
B)the flow-of-funds
C)incentive problems
D)derivative contracts.
E)All of these.

Question

Quizplus · Accepted Answer

Swap contracts are primarily used to manage risks associated with the flow-of-funds, such as interest rate risk or currency exchange rate risk, by exchanging cash flows between parties.

Swap Contracts Are Risk-Transfer Instruments That Are Used to Manage