If the Exchange Rate Alters During the Lifetime of a Cross-Currency

question 10

Multiple Choice

If the exchange rate alters during the lifetime of a cross-currency swap,this:

• A) has no impact as all FX risk has been eliminated.
• B) will impact only on the interest payments during the swap's lifetime.
• C) will impact only when the principal amounts are re-exchanged at maturity.
• D) will impact on both interest payments and principal repayments.

---

Definitions:

Teamwork

The joint endeavor of a team to reach a shared objective or finish a task in the most optimal and proficient manner.

Communication

The process of conveying information and meaning between individuals or groups through verbal, non-verbal, or written mediums.

Formal Lines

Established, structured communication channels within an organization, designated for official purposes and messages.

Authority

The authority or capability to issue commands, make choices, and ensure compliance.