A ________ transaction in the interbank market is the simultaneous purchase and sale of a given amount of foreign exchange for two different value dates.
A) spot
B) forward-forward
C) swap
D) futures

Question

Quizplus · Accepted Answer

A swap transaction involves the simultaneous purchase and sale of a given amount of foreign exchange for two different value dates. This allows for two parties to exchange different currencies and then reverse the exchange at a later date, effectively hedging against currency risk. Spot transactions involve the immediate exchange of currencies, while forward-forward transactions and futures involve agreements to exchange currencies at a specified future date.

A ________ Transaction in the Interbank Market Is the Simultaneous