The simultaneous purchase and sale of a given amount of foreign exchange for two different value dates is referred to as a:
A)fiscal barter.
B)liquid trade.
C)currency exchange.
D)currency swap.

Question

Quizplus · Accepted Answer

This scenario is known as a currency swap, where two parties exchange currencies for a specific period and then, at a pre-agreed exchange rate, re-exchange the currencies. It is commonly used in international trade to manage currency risks. The other options, fiscal barter and liquid trade, are not relevant to this scenario, while currency exchange is too broad and does not specify the particular transaction being described.

The Simultaneous Purchase and Sale of a Given Amount of Foreign