Which of the Following Statements Is True

Multiple Choice

Which of the following statements is true?

A) As with loans, swap participants deal with the credit risk of counterparties by setting bilateral limits on the notional amount of swaps entered into.
B) As with loans, swap participants deal with the credit risk of counterparties by adjusting the fixed and/or floating rates by including credit risk premiums.
C) As with loans, swap participants deal with the credit risk of counterparties by using Monte Carlo simulations to model potential default risk.
D) As with loans, swap participants deal with the credit risk of counterparties by setting bilateral limits on the notional amount of swaps entered into and as with loans, swap participants deal with the credit risk of counterparties by adjusting the fixed and/or floating rates by including credit risk premiums.