For Central Bank Liquidity Swaps, Which of the Following Is

question 5

Multiple Choice

For central bank liquidity swaps, which of the following is NOT true?

• A)Central bank liquidity swaps were intended to provide dollar funding to non-U.S.financial institutions during the global financial and economic crisis.
• B)In a central bank liquidity swap, the Fed provides dollars to a foreign central bank.
• C)Central-bank liquidity swaps failed to effectively address the dollar problems in foreign banking systems during the global financial and economic crisis, so the swap programs were ended in February 2010.
• D)Non-U.S.central banks used the dollars they received through central bank liquidity swaps to lend to financial institutions in their countries.

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Definitions:

Bond Indenture

A legal document detailing the terms and conditions of a bond issue, including the interest rate, maturity date, and obligations of the issuer.

Legal Document

A formal document that records agreements, contracts, or declarations and is recognized and enforceable by law.

Face Value

The nominal value printed on a financial instrument like a bond or currency note, representing its legal value.

Issuer

An entity, such as a corporation or government, that develops and offers securities for sale to investors to raise capital.