Derivatives Q29

0. Which of the following statements is least likely correct about interest rate swaps?

A
Interest rate swaps are derivatives where two parties agree to exchange a series of cash flows.
B
Interest rate swaps might require one party to make payments based on a fixed rate.
C
Interest rate swaps give the buyer the right to purchase the underlying from the seller.

Answer
Comment
Array

Option : C
Explanation : Interest rate swaps are derivatives where two parties agree to exchange a series of cash flows. Typically, one set of cash flows is variable and the other set is variable. Option C is a true statement with respect to call options, not swaps.

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