In an Interest-Only Currency Swap

question 34

Multiple Choice

In an interest-only currency swap

• A)the counterparties must raise the actual notational principal in their home markets; then exchange it for the foreign currency they desire.They must also hedge with forward contracts on the currency.
• B)the counterparties periodically exchange the amortized portions of the notational principals.
• C)both a) and b)
• D)none of the above

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Definitions:

Factory Utilities

Expenses related to services like electricity, water, and gas utilized in the manufacturing process.

Direct Materials

Raw materials that are directly traceable to the manufacturing of a specific product and included in its cost.

Manufacturing Overhead

Costs not directly tied to the production of goods, including rent for factory space and equipment depreciation.

Operating Expenses

These are the costs associated with running the day-to-day operations of a business, excluding the cost of goods sold.