Currency Swaps Are Used To

question 56

Multiple Choice

Currency swaps are used to:

• A) lock in an exchange rate for future delivery of a foreign currency.
• B) effectively transform loans originated in one currency to a different currency.
• C) transform fixed-rate loans into variable-rate loans.
• D) exchange foreign currencies in amounts not possible in the foreign exchange market.

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Definitions:

Arbitration

A method of resolving disputes in which an impartial third party delivers a conclusive judgment to settle a disagreement between parties.

Third Party

An individual or entity that is not directly involved in a situation, dispute, or transaction, but may influence or facilitate outcomes.

Conflicting Parties

Individuals, groups, or entities involved in a disagreement or dispute, each with opposing viewpoints or interests.

Voluntary Participation

Involves individuals choosing to take part in an activity or process without coercion, highlighting the importance of consent and willingness.