- This topic has 5 replies, 4 voices, and was last updated Jan-188:01 pm by
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Up1
Which of the following are the least likely methods of terminating a swap?
- Purchasing a swaption
- Selling the swap to a counterparty
- Returning the swap to the exchange
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Up5
swaps are otc agreements, so returning it to an exchange doesn’t make much sense…
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Up5
The least likely method is returning the swap to the exchange. Most swaps are over-the-counter
agreements, so there is no exchange. Even if there were, the exchange isn’t in
the business to assume one side of the swap, but rather to pair buyers and
sellers.The following methods of terminating a swap are feasible:
- Purchasing a swaption
- Selling the swap to a counterparty
- Enter into a separate offsetting swap
- The contract specifies early termination by either party
with cash settlement
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Up3
oh… it says what’s the least likely method…. yes, c is the best answer.
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Up3
LEAST, MOST…. those words really start to get on my nerves. Under pressure, it’s so easy to overlook them, and thus bye-bye 1/240 point. :s
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Up1
i was thinking to myself…why is this question so familiar, and then i realized it was on the Passedtense mock i took yesterday :smiley:
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