What is a currency swap? Describe the structure of and rationale for its cash flows
What will be an ideal response?
A currency swap is essentially an agreement between two parties to exchange the cash flows of two long-term bonds denominated in different currencies. The parties exchange initial principal amounts in the two currencies that are equivalent in value when evaluated at the spot exchange rate. Simultaneously, the parties agree to pay interest on the currency they initially receive, to receive interest on the currency they initially pay, and to reverse the exchange of principal amounts at a fixed future date.
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A. unsystematic B. diversifiable C. systematic D. asset-specific E. total
The ________ the level of environmental sensitivity for a given product, the ________ the need for managers to address country-specific economic, regulatory, technological, social, and cultural environmental conditions
A) greater; greater B) lower; greater C) greater; lower D) lower; lower E) stronger; greater