The 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

The economic benefits associated with swaps do not derive from nations with fixed or pegged exchange rates. Swaps may actually be less beneficial in such nations as there is less volatility in exchange rates to hedge against. The other answer choices are all valid ways in which swaps can provide economic benefits.

The Economic Benefits Associated with Swaps May Derive from All