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A US Company with an Investment in a Country with Currency

Question 19

Multiple Choice

A U.S company with an investment in a country with currency controls can engaged in a currency swap to avoid lost interest on earnings by


A) borrowing in the foreign currency and exchanging the interest with another company that has a dollar denominated interest payment
B) swapping the principal of a foreign currency loan with a local currency loan.
C) closing the investment.
D) buying an option to buy foreign currency using dollars.

Correct Answer:

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