economic benefits associated with swaps may derive from all of the following EXCEPT
A) legal restrictions on spot and forward foreign exchange transactions
B) different perceptions by investors of risk and creditworthiness of the two parties to the swap
C) appeal or acceptability of one borrower to a certain class of investor
D) in nations with fixed or pegged exchange rates

Question

Quizplus · Accepted Answer

This statement is incorrect as nations with fixed or pegged exchange rates can also benefit from swaps as they can still benefit from managing their interest rate or currency risks. The other options listed (A, B, and C) are valid economic benefits associated with swaps.

Economic Benefits Associated with Swaps May Derive from All of the Following