You Are the Debt Manager for a U

question 100

Multiple Choice

You are the debt manager for a U.S.-based multinational.You need to borrow €100,000,000 for five years.You can either borrow the €100,000,000 directly in Germany or borrow dollars in the U.S.and enter into a combined interest rate and currency swap with a swap bank.One risk that you face by using the swap that you do not face by borrowing euros directly is

• A)exchange rate risk.
• B)sovereign risk.
• C)credit risk.
• D)interest rate risk.

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Definitions:

Commissions

A form of payment to an agent for services rendered, typically a percentage of the sales they helped to make.

Delivered by People

Delivered by people refers to services or goods provided directly to the consumer through human interaction, emphasizing the personal touch in the delivery process.

Privately Owned

Describes businesses or assets owned by individuals or non-governmental entities, as opposed to being publicly traded or government-owned.

Publicly Owned

Refers to entities or businesses that are owned by the government or the public through publicly traded shares.