Consider a Swap to Pay Currency a Floating and Receive

question 15

Multiple Choice

Consider a swap to pay currency A floating and receive currency B floating.What type of swap would be combined with this swap to produce a swap to produce a plain vanilla swap in currency B.

• A)pay currency B floating,receive currency A fixed
• B)pay currency B fixed,receive currency A floating
• C)pay currency B fixed,receive currency A fixed
• D)pay currency B floating,receive currency A floating
• E)none of the above

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Definitions:

Consumer Spending

The total amount of money spent by households in an economy on goods and services.

Appreciation

An increase in the value of a currency in terms of other currencies.

Euro

The official currency used by 19 of the 27 European Union countries, also known as the eurozone.

Dollar

A currency unit used by the United States and other countries, represented by the symbol $, and used as a standard monetary unit in international transactions.