A swap agreement in financial markets is a contractual

arrangement that involves the exchange of:

A Only spot transactions Correct Answer Incorrect Answer

B Only futures contracts Correct Answer Incorrect Answer

C A combination of spot and forward transactions Correct Answer Incorrect Answer

D Interest rate futures and equity derivatives Correct Answer Incorrect Answer

E Only fixed-income securities Correct Answer Incorrect Answer

Solution

Swaps involve exchanging financial instruments, often combining spot and forward components. For example, in a currency swap, one party may pay a fixed interest in one currency and receive variable interest in another.

Practice Next

Relevant for Exams:

IIFCL Grade A

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