Which one of the following is a reason for firms to engage in currency swaps?
A) They will be required to repay only the interest.
B) They can obtain more favorable terms by borrowing in a different currency.
C) The debt will not show on their balance sheets.
D) You can borrow in the currency with the lowest interest rate without taking on any currency risk.

Question

Quizplus · Accepted Answer

Currency swaps allow firms to borrow in a currency where they have a comparative advantage, often obtaining more favorable terms, and then swap it for the currency they need.

Which One of the Following Is a Reason for Firms