Asked by Eribel Almonte on Jul 17, 2024
Verified
A swap contract can be based on currencies, interest rates, or commodities.
Swap Contract
An agreement by two parties to exchange, or swap, specified cash flows at specified intervals in the future.
Currencies
Forms of money that are issued by governments and used as a medium of exchange for goods and services in economic transactions.
Interest Rates
The percentage charged on the total amount borrowed or earned, reflecting the cost of borrowing or the yield on investments.
- Comprehend the role and nature of swap contracts in the financial markets.
Verified Answer
BR
Bailey RobinsonJul 24, 2024
Final Answer :
True
Explanation :
Swap contracts are versatile financial instruments that can indeed be based on various underlying assets, including currencies (currency swaps), interest rates (interest rate swaps), and commodities (commodity swaps).
Learning Objectives
- Comprehend the role and nature of swap contracts in the financial markets.