Interest Rate Swaps and Cross-Currency Swaps

question 56

Multiple Choice

Interest rate swaps and cross-currency swaps:

• A) appear on the balance sheets of commercial banks as current assets.
• B) appear on the balance sheets of commercial banks as current liabilities.
• C) appear on the balance sheets of commercial banks as long-term liabilities.
• D) do not appear on the balance sheet.

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Definitions:

Balance Sheet

A financial statement that presents the assets, liabilities, and shareholders' equity of a company at a specific point in time, showing the financial position.

Fair Value

An estimate of the market value of an asset or liability, based on current prices in active markets for identical or similar items.