A floating for floating currency swap is equivalent to
A) Two interest rate swaps, one in each currency
B) A fixed-for-fixed currency swap and one interest rate swap
C) A fixed-for-fixed currency swap and two interest rate swaps, one in each currency
D) None of the above

Question

Quizplus · Accepted Answer

A floating-for-floating currency swap where the currency paid is X and the currency received is Y is equivalent to (a)a fixed-for-fixed currency swap where,say,5% in currency X is paid and say,say,4% in currency Y is received,(b)a regular interest rate swap where 5% in currency X is received and floating in currency X is paid and (c)a regular interest rate swap where where 4% in currency Y is paid and floating in currency Y is received.

A Floating for Floating Currency Swap Is Equivalent to