The underlying principle of a swap agreement is to restructure asset or liability cash flows in a preferred direction by the transacting parties.

Question

Quizplus · Accepted Answer

This is correct as the main purpose of a swap agreement is to exchange cash flows between two parties in order to achieve a more favorable outcome for each party. This could involve swapping interest rate payments, currency payments, or other types of payments, but the objective is always to restructure cash flows in a way that is beneficial to both parties.

The Underlying Principle of a Swap Agreement Is to Restructure