What is a receiver swaption?

A receiver swaption is a financial derivative that gives the holder the right, but not the obligation, to enter into an interest rate swap agreement as the fixed-rate receiver. This means that if interest rates fall, the holder can take advantage of the situation by locking in a fixed rate, which can be beneficial for managing exposure to fluctuating interest rates. The key characteristic of a receiver swaption is that it allows the holder to benefit from a decrease in interest rates while providing the option not to execute the swap if rates rise.

In the context of the other options, the right to pay fixed on an interest rate swap would characterize a payer swaption, which is not what a receiver swaption provides. Similarly, the option to enter any swap at maturity is not specific to the function of a receiver swaption and lacks the definitive purpose linked to fixed interest rate exposure. Lastly, while the concept of exchanging assets may pertain to various financial transactions, it does not accurately capture the essence of a receiver swaption's structure and purpose within interest rate management.