A swap contract is an agreement to:
A) Sell a specific asset at a predetermined price sometime in the future.
B) Hedge an asset with a different asset.
C) Exchange specified cash flows at specified intervals in the future.
D) Exchange one currency for a specified amount of another currency.
E) Realize gains and losses on a daily basis.

Question

Quizplus · Accepted Answer

A swap contract is essentially an agreement between two parties to exchange cash flows or other financial instruments at set intervals in the future, which is accurately described in option C.

A Swap Contract Is an Agreement To