A currency swap is equivalent to a
A) currency option, with the exercise price equal to the current spot rate.
B) longdated 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.
Answer: B
You might also like to view...
Why are overstated reserves sometimes referred to as "cookie jar" reserves?
a. Companies involved in mergers or acquisitions overstate their liabilities by creating cookie jar reserves. b. The reserve is commonly created during bad times or when routine senior management changes occur. c. Some companies may require customers to make deposits for future goods or services that can be intentionally recorded as revenue, which is like money stored in a cookie jar. d. Like money stored in a cookie jar, overstated revenues represent a stash of accounting earnings that can be used to bolster the perceived performance of the company in the future.
On June 1, Apex Co issued a $30,000, 8%, 120-day note payable to Jones Co Assume the fiscal year of Apex Co ends June 30 . What is the amount of interest expense recognized by Apex in the current year?
a. $750.00 b. $166.67 c. $333.33 d. $200.00