What is a swap?
A)An agreement between two parties to exchange assets or a series of cash flows for a specific period of time at a specified interval.
B)An agreement between a buyer and a seller at time 0 to exchange a non-standardised asset for cash at some future date.
C)A contract that gives the holder the right, but not the obligation, to buy or sell the underlying asset at a specified price within a specified period of time.
D)Trading in securities prior to their actual issue.

Question

Quizplus · Accepted Answer

A swap is an agreement between two parties to exchange assets or a series of cash flows for a specific period of time at a specified interval. This can involve exchanging fixed and floating interest rate payments or exchanging one currency for another. Swaps are commonly used by corporations and financial institutions to manage risk or reduce financing costs.

What Is a Swap