Which of the Following Statements Regarding a Cross-Currency Swap Is

question 25

Multiple Choice

Which of the following statements regarding a cross-currency swap is incorrect?

• A) There is an exchange of principal amounts between counterparties at the beginning and end of the swap.
• B) The re-exchange at the conclusion of a cross-currency swap usually takes place at the initial exchange rate.
• C) As the cross-currency swap is arranged through a bank, there is no credit risk.
• D) Once the cross-currency swap rate is determined, cash flows are known with certainty.

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Definitions:

Reward

An incentive or benefit given for completing certain tasks or reaching certain goals, aimed at motivating further action or behavior.

Contingency Of Reinforcement

A principle in behaviorism stating that the effectiveness of reinforcement depends on the situation or conditions under which it is administered.

Positive Reinforcement

A motivational technique in psychology, involving the addition of a rewarding stimulus following a desired behavior, to increase the likelihood of it occurring again.

Pleasant Event

An occurrence that induces positive feelings, satisfaction, or enjoyment.