A swap
A)is not traded on an organized exchange and is customized to meet the needs of the parties.
B)is not traded on an organized exchange and is subject to formal regulations which results in standardized contrasts
C)is traded on an organized exchange and is subject to formal regulations which results in standardized contrasts.
D)is traded on an organized exchange and is customized to meet the needs of the parties.

Question

A swap
A)​is not traded on an organized exchange and is customized to meet the needs of the parties.
B)​is not traded on an organized exchange and is subject to formal regulations which results in standardized contrasts
C)​is traded on an organized exchange and is subject to formal regulations which results in standardized contrasts.
D)​is traded on an organized exchange and is customized to meet the needs of the parties.

Quizplus · Accepted Answer

A swap is considered an over-the-counter (OTC) financial instrument, which means it is not traded on an organized exchange. Instead, it is customized to meet the needs of the parties involved. This customization allows for flexibility in terms of the terms and conditions of the swap, such as the underlying asset, notional amount, and payment schedule.

A Swap