A British Firm and a U

question 38

Multiple Choice

A British firm and a U.S. Corporation each wish to enter into a currency swap hedging agreement. The British firm is receiving U.S. dollars from sales in the U.S. but wants pounds. The U.S. firm is receiving pounds from sales in Britain but wants dollars. Which of the following choices would best satisfy the desires of the firms?

• A) The British firm pays dollars to a swap dealer and receives pounds from the dealer. The U.S. firm pays pounds to the swap dealer and receives dollars.
• B) The U.S. firm pays dollars to a swap dealer and receives pounds from the dealer. The British firm pays pounds to the swap dealer and receives dollars.
• C) The British firm pays pounds to a swap dealer and receives pounds from the dealer. The U.S. firm pays dollars to the swap dealer and receives dollars.
• D) The British firm pays dollars to a swap dealer and receives dollars from the dealer. The U.S. firm pays pounds to the swap dealer and receives pounds.

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Definitions:

Structure

Refers to the arrangement of atoms within a molecule or the arrangement of residues in a biological macromolecule, determining its shape and function.

Glycine

The simplest amino acid, with the chemical formula NH2CH2COOH, used in the body to make proteins.

Amino Acid

Organic compounds that serve as the building blocks of proteins, containing both amino (-NH2) and carboxylic acid (-COOH) functional groups.

Polypeptide

A molecule consisting of a chain of amino acids linked by peptide bonds, and is the building block of proteins.