Which of the following is NOT a reason that a swap may have less credit risk than an individual loan?
A)Netting of payments.
B)Payment flows are interest and not principal.
C)Standby letters of credit are available.
D)Swaps can be cancelled,individual loans cannot.

Question

Quizplus · Accepted Answer

Swaps can be cancelled, but this does not inherently reduce credit risk compared to individual loans. The other options relate to mechanisms that can mitigate credit risk in swaps.

Which of the Following Is NOT a Reason That a Swap