In a(n) ______________, two parties contract to deliver one currency in exchange for another at speciﬁc times over some ﬁxed interval of time.

Question

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A currency swap involves the exchange of one currency for another between two parties, usually over a fixed period of time. Each party agrees to pay the other the principal and interest on a loan denominated in a different currency. This can be used to manage currency risk, obtain financing in a different currency or take advantage of different interest rates in different countries.

In A(n) ______________, Two Parties Contract to Deliver One Currency