Which combination of the following represent the risks that a swap dealer confronts? (i)- interest rate risk
(ii)- basis risk
(iii)- exchange rate risk
(iv)- political risk
(v)- sovereign risk
A)(i), (ii), (iii), and (v)
B)(i), (iii), and (iv)
C)(iii), (iv), and (v)
D)(i), (ii), (iii), (iv), and (v)

Question

Quizplus · Accepted Answer

Swap dealers face a variety of risks including interest rate risk, basis risk, exchange rate risk, political risk, and sovereign risk, as they are involved in complex financial transactions across different markets and jurisdictions.

Which Combination of the Following Represent the Risks That a Swap