Amortizing Currency Swaps

question 33

Multiple Choice

Amortizing currency swaps

• A)the debt service exchanges decrease periodically through time as the hypothetical notational principal is amortized.
• B)incorporate an amortization feature in which periodically the amortized portions of the notational principals are re-exchanged.
• C)both a and b
• D)none of the above

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Definitions:

Double-Declining Balance

A method of accelerated depreciation where an asset loses value at double the rate of the traditional straight-line depreciation method.

Straight-Line

A method of calculating depreciation or amortization by evenly allocating the cost of an asset over its expected useful life.

Sum-Of-Years' Digits

An accelerated method of depreciation which involves allocating the cost of an asset over its useful life in a way that results in higher depreciation expense in the earlier years and lower expense in later years.

Salvage Value

The anticipated market value of an asset upon completing its service life.