Which of the following are true of interest rate swaps?
A . Risk of default is high from the floating interest rate payer if interest rates rise.
B . An interest rate swap is an external hedging technique.
C . When interest rates are falling, the risk of default by the fixed interest rate payer is low.
D . Some companies use interest rate swaps to deliberately increase their risks because they believe that they are better at predicting future interest rates than the market.
E . An interest rate swap is an internal hedging technique.
Answer: A,B,D