prashantsahni

Which of the following statements regarding plain-vanilla interest rate swaps is least accurate?

A) The settlement dates are when the interest payments are to be made.

B) The time frame covered by the swap is called the tenor of the swap.

C) In a swap contract, the counterparties usually swap the notional principal.

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The notional principal is generally not swapped, as it is usually the same for both parties in the swap deal.

prashantsahni

All of the following are ways to exit a swap contract EXCEPT:

A) selling a swaption.

B) entering an offsetting swap with the original counterparty.

C) making a cash payment to the original counterparty.

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Selling a swaption gives the seller an obligation to enter into a swap if the swaption is exercised. To exit a swap, the entity would want to buy the swaption.