The following are benefits of a currency swap except:
A) Swaps avoid dealing with any interest payments.
B) Swaps lower transaction costs of cross-currency cash management.
C) Swaps reduce foreign exchange risk for financing transactions.
D) Swaps allow firms to acquire financing for which it has a comparative advantage.

Question

Quizplus · Accepted Answer

Currency swaps involve exchanging principal and interest payments in different currencies, so they do involve dealing with interest payments. The other options are all benefits of currency swaps.

The Following Are Benefits of a Currency Swap Except