Q527
Type of swaps in which fixed payments of interest are exchanged by two counterparties for floating payments of interest are called
A.
float-fixed swaps
B.
interest rate swaps
AnswerC.
indexed swaps
D.
counter party swaps
Answer: Option B
Solution
Answer: Option B
Solution:
Type of swaps in which fixed payments of interest are exchanged by two counterparties for floating payments of interest are called interest rate swaps. An interest rate swap is a type of a derivative contract through which two counterparties agree to exchange one stream of future interest payments for another, based on a specified principal amount. In most cases, interest rate swaps include the exchange of a fixed interest rate for a floating rate.