A Currency Swap Is Equivalent to a

question 16

Multiple Choice

A currency swap is equivalent to a

• A)currency option,with the exercise price equal to the current spot rate
• B)long-dated forward foreign exchange contract,where the forward rate is the current spot rate.
• C)interest rate swap,where the basis is the differential between the fixed and floating interest rates
• D)short-term currency futures contract

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Definitions:

Mineral Deposit

A natural concentration of minerals in the Earth's crust that can be mined for economic benefit.