Swap Transactions

question 16

Multiple Choice

Swap transactions

• A)involve the simultaneous sale (or purchase) of spot foreign exchange against a forward purchase (or sale) of approximately an equal amount of the foreign currency.
• B)account for about half of Interbank FX trading.
• C)involve trades of one foreign currency for another without going through the U.S. dollar.
• D)all of the above

---

Definitions:

Significance Level

The probability of rejecting the null hypothesis when it is actually true, often denoted as alpha (α) and typically set at 0.05 or 5%.

Null Hypotheses

A statement in statistical inference that proposes no significant difference or no effect, serving as the default assumption to be tested.

Alternative Hypothesis

A statement in hypothesis testing that proposes a significant difference or effect, contrasting the null hypothesis.

Average Amount

The sum of a collection of numbers divided by the count of numbers in the collection.