An interest rate swap between two firms of different countries enables the exchange of ____ for ____.

Question

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An interest rate swap is a financial derivative instrument in which two parties agree to exchange interest rate cash flows based on a notional principal amount. In the case of a swap between two firms of different countries, the exchange would typically involve fixed rate payments in one currency for floating rate payments in another currency. This allows each firm to benefit from the interest rate environment in their respective countries while also mitigating risk associated with fluctuations in interest rates.

An Interest Rate Swap Between Two Firms of Different Countries