A swap that is used to evade risk of exchange rate exists because of currency mismatching is classified as
A. floating swaps
B. fixed swaps
C. currency swaps
D. notion swaps
Answer: Option C
Solution (By Examveda Team)
A swap that is used to evade risk of exchange rate exists because of currency mismatching is classified as currency swaps. A currency swap is an agreement in which two parties exchange the principal amount of a loan and the interest in one currency for the principal and interest in another currency. At the inception of the swap, the equivalent principal amounts are exchanged at the spot rate.This Question Belongs to Management >> International Finance And Treasury
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