A swap that involves the exchange of a set of payments in one currency for a set of payments in another currency is a(n)________.
A) interest-rate swap
B) currency swap
C) swaption
D) notional swap

Question

Quizplus · Accepted Answer

A swap that involves the exchange of payments in one currency for payments in another currency is called a currency swap. Interest-rate swaps involve the exchange of fixed and/or floating interest-rate payments in the same currency. Swaptions give the holder the right, but not the obligation, to enter into a swap at a predetermined rate and time. Notional swaps are not a widely recognized financial instrument.

A Swap That Involves the Exchange of a Set of Payments