Task: Class Definition Understanding (ontology: Business_Finance/Financial_Industry_Business_Ontology)

Which of the following definitions best describes 'equity price return swap'?

A. dispersion swap that is a forward contract on the variability of movements in the price of its underlying equities
B. correlation swap that allows one to hedge risks associated with the observed average correlation of a collection of underlying equity products
C. return swap whose return leg underlier is based on equities
D. equity swap that has at least one leg whose underlier is a dividend stream

Answer: return swap whose return leg underlier is based on equities