A swap is a method used to reduce risk. which of the following statements about

Question

A swap is a method used to reduce risk. which of the following statements about swaps , if any, is NOT CORRECT?

A swap involves the exchange of cash payment obligations.

The earliest swaps were currency swaps in which companies traded debt denominated in different currencies say dollars and pounds

Swaps are very often arranged by a financial intermediary who may or may not take the position of one of the counterparties.

A problem with swaps is that no standardized contracts exist, which has prevented the development of a secondary market.

A company can swap fixed interest payments for floating interest payments

Explanation / Answer

A problem with swaps is that no standardized contracts exist, which has prevented the development of a secondary market

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