In a "total return swap," the underlying asset(s)might be a
A)common stock and loan.
B)common stock, loan, and commodity.
C)common stock, loan, commodity, and market index.
D)market index.

Question

Quizplus · Accepted Answer

A total return swap allows for the exchange of the total return of an underlying asset or assets between two parties. The underlying assets in a total return swap can be diverse, but commonly include a combination of common stock, loan, commodity, and market index. Therefore, choice C includes all the possible underlying assets, making it the best choice.

In a "Total Return Swap," the Underlying Asset(s)might Be a