What Is an FX Swap from Spot

question 88

Multiple Choice

What is an FX swap from spot?

• A) An exchange of two streams of interest payments in different currencies and an exchange of the principal amounts of those currencies at maturity
• B) A spot sale (purchase) and a forward purchase (sale) of two currencies agreed simultaneously between two parties
• C) An exchange of currencies on a date beyond spot and at a price fixed today
• D) An agreement to buy (sell) an amount of base currency value spot and simultaneously resell (buy back) the same amount to the same counterpart value today

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Definitions:

Demand

The quantity of a particular good or service that consumers are willing and able to purchase at various prices during a given period of time.

Supply Curve

A graphical representation showing the relationship between the quantity of goods that producers are willing to sell and the price of those goods.

Relatively Elastic

Describes a situation where the quantity demanded or supplied of a good or service changes significantly in response to a change in price.