A(n)________ allows a multinational corporation to change the currency of denomination of its debts.

Question

Quizplus · Accepted Answer

A currency swap allows a multinational corporation to exchange debt denominated in one currency for debt denominated in another currency. This allows the corporation to manage its currency risk and potentially take advantage of more favorable interest rates in the foreign currency. An interest rate swap involves exchanging debt with different interest rates, while currency option and currency future contracts give the corporation the option or obligation to buy or sell currencies at a specified price in the future.

A(n)________ Allows a Multinational Corporation to Change the Currency of Denomination