Asked by Edgar Quinones on Jun 18, 2024
Verified
A swap contract is an agreement to:
A) Sell a specific asset at a predetermined price sometime in the future.
B) Hedge an asset with a different asset.
C) Exchange specified cash flows at specified intervals in the future.
D) Exchange one currency for a specified amount of another currency.
E) Realize gains and losses on a daily basis.
Swap Contract
An agreement between two parties to exchange sequences of cash flows over a set period of time, generally used to exchange different types of interest rates or currencies.
Specified Cash Flows
Designated or particular cash movements into or out of a business or investment over a defined period.
- Grasp the concept of swap contracts and their applications in finance.
Verified Answer
JF
Jennah FaiolaJun 21, 2024
Final Answer :
C
Explanation :
A swap contract is essentially an agreement between two parties to exchange cash flows or other financial instruments at set intervals in the future, which is accurately described in option C.
Learning Objectives
- Grasp the concept of swap contracts and their applications in finance.