An Interest Rate Swap

Multiple Choice

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.