The Following Are Benefits of a Currency Swap Except

question 8

Multiple Choice

The following are benefits of a currency swap except:

• A) Swaps avoid dealing with any interest payments.
• B) Swaps lower transaction costs of cross-currency cash management.
• C) Swaps reduce foreign exchange risk for financing transactions.
• D) Swaps allow firms to acquire financing for which it has a comparative advantage.

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Definitions:

Shifted

Refers to a change in position or direction, often used in economics to describe movements in supply or demand curves.

Sales Tax

A tax imposed on sales of goods and services, typically calculated as a percentage of the purchase price and collected by the retailer.

Progressive Tax System

A taxation system where the tax rate increases as the taxable amount or income increases, meaning higher-income individuals pay a larger percentage of their income in taxes than lower-income individuals.