easy · FRM Part 1 Financial Markets and Products
What is the primary difference between a 'swap' and an 'FRA'?
- FRAs trade only on exchanges, while swaps trade over the counter.
- FRAs reference only a fixed rate, while swaps reference only a floating rate.
- An FRA is a single-period contract, whereas a swap covers multiple periods.
- Swaps require an exchange of principal at maturity; FRAs never involve principal exchange.
Sign up free to see the explanation and track your rank →
More FRM Part 1 Financial Markets and Products practice
- If the oil market shifts from backwardation to a persistent contango, which of the followi
- If at the time of delivery S_1 = $72 and F_1 = $74, while the hedge was entered at F_0 =
- According to the standard 'Default Waterfall' of a Central Counterparty (CCP), which layer
- A 'Fallen Angel' is a term used in the bond market to describe:
- A 'long' position in which of the following provides insurance against a rise in prices?
- An American put option is deep in the money. Why might it be optimal to exercise this opti
- If at maturity the futures price were significantly higher than the spot price, what would
- How is the 'swap rate' typically determined at the inception of an interest-rate swap?