A British Firm and a U

question 38

Multiple Choice

A British firm and a U.S. Corporation each wish to enter into a currency swap hedging agreement. The British firm is receiving U.S. dollars from sales in the U.S. but wants pounds. The U.S. firm is receiving pounds from sales in Britain but wants dollars. Which of the following choices would best satisfy the desires of the firms?

• A) The British firm pays dollars to a swap dealer and receives pounds from the dealer. The U.S. firm pays pounds to the swap dealer and receives dollars.
• B) The U.S. firm pays dollars to a swap dealer and receives pounds from the dealer. The British firm pays pounds to the swap dealer and receives dollars.
• C) The British firm pays pounds to a swap dealer and receives pounds from the dealer. The U.S. firm pays dollars to the swap dealer and receives dollars.
• D) The British firm pays dollars to a swap dealer and receives dollars from the dealer. The U.S. firm pays pounds to the swap dealer and receives pounds.

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Definitions:

Fossilization

The process by which living organisms are preserved as fossils, including permineralization, cast and mold formation, and amber entrapment.

Isotopic Ages

The determination of the age of a material based on the decay rate of its radioactive isotopes, crucial for understanding geological and archaeological timelines.

Crosscutting Dike

A geological feature where a body of igneous rock cuts across the structure of adjacent rocks, indicating it is younger.

Paleozoic

An era of geological time from about 541 to 252 million years ago, marked by the development of abundant marine life and the first appearance of life on land.