CFA CFA Level 1 Question of the Week – Derivatives

Question of the Week – Derivatives

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    • Avatar of ufsguyufsguy
      Participant
        • Undecided
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        5
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        swaps are otc agreements, so returning it to an exchange doesn’t make much sense…

      • Avatar of AdaptPrepAdaptPrep
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          • Undecided
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          5
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          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
        • Avatar of ufsguyufsguy
          Participant
            • Undecided
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            3
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            oh… it says what’s the least likely method…. yes, c is the best answer.

          • Avatar of wm247wm247
            Participant
              • Undecided
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              3
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              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

            • Avatar of simply_complex2simply_complex2
              Participant
                • CFA Level 1
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                1
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                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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