As a Foreign Exchange Hedge, Currency Swaps Have All of the Following

question 11

Multiple Choice

As a foreign exchange hedge, currency swaps have all of the following characteristics EXCEPT

• A) an initial exchange by two parties of two principal amounts in two different currencies.
• B) principal amounts are reversed at the spot rate at maturity.
• C) each party pays the other's interest payment.
• D) principal amounts are reversed at a pre-agreed rate at maturity.

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Definitions:

Functional Magnetic Resonance Imaging

A neuroimaging procedure that measures brain activity by detecting changes in blood flow, often used to observe mental processes.

PET Scan

A medical imaging technique that uses a radioactive substance to visualize and measure metabolic processes in the body.

Positron-Emission Tomography

A diagnostic imaging test using a radioactive substance to visualize and measure changes in metabolic processes and other physiological activities.

Radioactive Substance

A material that emits radiation as a result of the decay of unstable atomic nuclei.