When a Bank Enters into a Fixed-Floating Currency Swap, It

question 44

Multiple Choice

When a bank enters into a fixed-floating currency swap, it is exposed to

• A)both interest rate and currency exposures.
• B)only interest rate exposures.
• C)only exchange rate exposure.
• D)zero interest rate exposure over the life of the swap.
• E)zero interest rate and currency exposure over the life of the swap.

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Definitions:

Technological Effect

The impact of technology on society, including changes in behaviour, efficiency, and economic structures.

Relational

Pertaining to or characterized by relationships or connections between people.

Operational

Pertaining to the day-to-day activities and processes involved in running an organization or system.