Currency Swaps Are Often Used to Provide Long-Term Financing in Foreign

question 3

Multiple Choice

Currency swaps are often used to provide long-term financing in foreign currencies but NOT because

• A)long-term capital markets are not well developed
• B)long-term forward foreign exchange markets are absent
• C)of high foreign taxes
• D)long-term capital markets are easily accessible

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Definitions:

Operating Income

Earnings before interest and taxes (EBIT), representing the profit from a company’s ordinary, core business operations.

Contribution Format

An income statement layout that separates fixed and variable costs, allowing for the calculation of contribution margin and easier analysis of profitability.

Operating Income

A financial metric that shows how much of a company's revenue is left over after paying for variable costs of production like wages and raw materials.

Contribution Format

A method of income statement presentation that separates fixed costs from variable costs to show the contribution margin.