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Question
An interest rate swap
A. involves a swap buyer who agrees to make a number of variable-rate payments on periodic settlement dates.
B. involves a swap seller who agrees to make a number of fixed-rate payments on periodic settlement dates.
C. is effectively a succession of forward contracts on interest rates.
D. involves comparative advantage by the fixed-rate side of the swap, but not the variable-rate side.
E. eliminates credit risk.
Answer
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