2、Which of the following statements concerning the buyer of a total return swap is TRUE? The swap buyer:

A) does not assume any of the asset’s credit risk.

B) receives the total return of the reference asset.

C) purchases the underlying asset.

D) receives LIBOR plus a spread.

The correct answer is B

Since the swap buyer receives the total return of the reference asset, she assumes the asset’s credit risk. The swap buyer does not purchase the underlying asset and pays LIBOR + a spread.