Interest Rate and Currency Swaps Allow One Party to Exchange

question 22

Multiple Choice

Interest rate and currency swaps allow one party to exchange a:

• A) floating interest rate or currency value for a fixed interest or value over the contract term.
• B) fixed interest rate or currency value for a lower fixed value over the contract term.
• C) floating interest rate or currency value for a lower floating value over the contract term.
• D) a fixed interest rate position for a currency position over the contract term.

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Definitions:

Sales Revenues

Income received from selling goods or services over a period of time.

Net Sales

The amount of sales generated by a company after deducting returns, allowances for damaged or missing goods, and discounts.

Current Ratio

A liquidity ratio that measures a company's ability to cover its short-term obligations with its short-term assets.

Liquidity

The ease with which an asset or security can be converted into cash without affecting its market price.