Question: A swap is a method used to reduce risk. which of the following statements about swaps , if any, is NOT CORRECT? A swap involves

A swap is a method used to reduce risk. which of the following statements about swaps , if any, is NOT CORRECT?

A swap involves the exchange of cash payment obligations.

The earliest swaps were currency swaps in which companies traded debt denominated in different currencies say dollars and pounds

Swaps are very often arranged by a financial intermediary who may or may not take the position of one of the counterparties.

A problem with swaps is that no standardized contracts exist, which has prevented the development of a secondary market.

A company can swap fixed interest payments for floating interest payments

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!

Q:

12. a. Risk management can reduce the volatility of cash flows, and this decreases the probability of bankruptcy. b. Risk management makes sense for firms directly engaged in activities that involve...

Q:

15. A swap is a method for reducing financial risk. Which of the following statements about swaps is not correct? a. A swap involves the exchange of cash payment obligations. b. The earliest swaps...

Q:

A swap is a method for reducing financial risk. Which of the following statements about swaps, if any, is incorrect? Select one: a. A swap involves the exchange of cash payment obligations. b. The...

Q:

A swap is a method used to reduce financial risk. Which of the following statements about swaps, if any, is NOT CORRECT? a. The earliest swaps were currency swaps, in which companies traded debt...

Q:

1. The Harold Co. plans to issue 20-year bonds in 6 months to help finance a new project. The current cost of debt to the company is 9 percent. However, the company believes that interest rates will...

Q:

1. The Harold Co. plans to issue 20-year bonds in 6 months to help finance a new project. The current cost of debt to the company is9 percent.However, the company believes that interest rates will...

Q:

A swap is a method used to reduce financial risk. Which of the following statements about swaps, if any, is NOT CORRECT? a A swap involves the exchange of cash payment obligations. O b. The earliest...

Q:

A swap is a method used to reduce financial risk. Which of the following statements about swaps, if any, is not correct? (a) A swap involves the exchange of cash payment obligations. (b) The earliest...

Q:

A swap is a method used to reduce financial risk. Which of the following statements about swaps is CORRECT?a. Swaps no longer allow side payments.b. Most swaps today involve the exchange of debt...

Q:

Which of the following statements regarding swaps is correct? a . An interest rate swap involves exchanging interest payments in one currency for interest payments in a second currency. b . The...

Q:

Lion Company is considering the acquisition of Tiger Company, Inc. in early 2018. To assess the amount it might be willing to pay, Lion Company makes the following calculations and assumptions. The...

Q:

Researchers at the University of Washington conducted an experiment to determine whether the herbal remedy Echinacea is effective in treating childrens colds and other respiratory infection (National...

Q:

Identify three pieces of information requested by the government about the business reflected in the Schedule C in IRS schedule

Q:

2023 1040 form 1.Phillip and Claire are married and file a joint return. Phillip is self-employed as a real estate agent, and Claire is a flight attendant. Phillip and Claire have three dependent...