The Primary Reasons for a Counterparty to Use a Currency

question 9

Multiple Choice

The primary reasons for a counterparty to use a currency swap are:

• A)to hedge and to speculate
• B)to play in the futures and forward markets
• C)to obtain debt financing in the swapped currency at an interest cost reduction brought about through comparative advantages each counterparty has in its national capital market, and the benefit of hedging long-run exchange rate exposure
• D)a and b

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Definitions:

Abnormal Termination

The unexpected interruption of a program's execution due to errors like runtime exceptions, resulting in the program ending abruptly.

Base Case

In recursion, the condition under which the recursive process ends, preventing infinite recursion.

Recursive Solution

A recursive solution involves solving a problem by breaking it into smaller instances of the same problem, typically involving a function calling itself.

Iterative Solution

A method of solving a problem by repeatedly using a set of operations until a certain condition is met.