Which of the following transactions is used to move out of one currency into another for a limited period without incurring foreign exchange risk?

Question

Quizplus · Accepted Answer

Currency swap is used to move out of one currency into another for a limited period and without incurring foreign exchange risk by swapping principal and interest payments with another party. It involves two parties exchanging currencies for a specified period and then reversing the exchange at a later date specified in the contract. This allows companies and investors to borrow in one currency and lend in another currency without being exposed to foreign exchange risk.

Which of the Following Transactions Is Used to Move Out