Question

Which of the following refers to the simultaneous purchase and sale of a given amount of foreign exchange for two different v

0 0
Add a comment Improve this question Transcribed image text
Answer #1

Ans) the correct option is a) currency swap

When one counterparty exchanges the debt service obligations of a bond for the debt service obligations of the other counterparty denominated from one currency to other currency.

Add a comment
Know the answer?
Add Answer to:
Which of the following refers to the simultaneous purchase and sale of a given amount of...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions
  • Currency speculation takes place when Multiple Choice the exchange rate at which a foreign exchange dealer...

    Currency speculation takes place when Multiple Choice the exchange rate at which a foreign exchange dealer will convert one currency differs on a particular day. the growth in a country's money supply exceeds the growth in its output, leading to price inflation. the purchase of securities in one market are immediately resold in another to profit from a price discrepancy. there is a simultaneous purchase and sale of a given amount of foreign exchange for two different value dates. there...

  • One function of the foreign exchange market is to Multiple Choice provide some insurance against foreign...

    One function of the foreign exchange market is to Multiple Choice provide some insurance against foreign exchange risk. protect short-term cash flow from adverse changes in exchange rates. eliminate volatile changes in exchange rates. reduce the economic exposure of a firm. enable companies to engage in capital flight when countertrade is not possible. Rhonda tells Kevin that he will receive 0.86 euro for every U.S. dollar he wants to convert. Rhonda is referring to Multiple Choice the exchange rate. arbitration....

  • Which of the following statements is true of the types of Foreign Direct Investments (FDI)? In...

    Which of the following statements is true of the types of Foreign Direct Investments (FDI)? In the case of developing nations, more than two-thirds of FDI is in the form of cross-border mergers and acquisitions. FDI flows into developed nations show patterns that are remarkably similar from those into developing nations. Greenfield investments are typically slower to execute than mergers and acquisitions. The higher percentage of mergers and acquisitions in developing nations compared to developed nations indicate the low valuation...

  • A U.S. exporter has a Thai baht account receivable resulting from an export sale on June...

    A U.S. exporter has a Thai baht account receivable resulting from an export sale on June 1 to a customer in Thailand. The exporter signed a forward contract on June 1 to sell Thai baht and designated it as a cash flow hedge of a recognized Thai baht receivable. The spot rate was $0.022 on that date, and the forward rate was $0.021. Forward points are excluded from the assessment of hedge effectiveness. Which of the following is true with...

  • Which of the following hedging strategies would a business most likely use? Multiple Choice An importer will want...

    Which of the following hedging strategies would a business most likely use? Multiple Choice An importer will want to hedge his foreign denominated accounts receivable and will purchase forward contracts to hedge and exposed net asset position An importer will want to hedge his foreign denominated accounts payable and will purchase forward contracts to hedge an exposed net lability position payable and will purchase forward contracts to hedge An exporter will want to hedge his foreign denominate exposed net lability...

  • Icebreaker Company (a U.S.-based company) purchases materials from a foreign supplier on December 1, 2020,...

    Icebreaker Company (a U.S.-based company) purchases materials from a foreign supplier on December 1, 2020, with payment of 27,000 dinars to be made on March 1, 2021. The materials are consumed immediately and recognized as cost of goods sold at the date of purchase. On December 1, 2020, Icebreaker enters into a forward contract to purchase 27,000 dinars on March 1, 2021.Relevant exchange rates for the dinar on various dates are as follows: DateSpot RateForward Rate(to March 1, 2021)December 1, 2020$4.50$4.575December...

  • Crown Corporation, a United States Company, made a sale to a foreign customer on September 15,...

    Crown Corporation, a United States Company, made a sale to a foreign customer on September 15, 2018 in the amount of 100,000 FCU (foreign currency units). On the same day, as a hedge, Crown entered into a forward contract that will require the company to trade 100,000 FCU for dollars on October 15. The company closed its books and prepared financial statements on September 30. Crown's customer paid its account on October 15, 2018, and the forward contract was completed...

  • 1. The "trilemma" concept refers to the fact that a nation may simultaneously select a combination...

    1. The "trilemma" concept refers to the fact that a nation may simultaneously select a combination of any two, but not all three, of the following: Select one: a. a managed, dirty float for the exchange rate; a non-independent monetary policy; closure of domestic markets to financial capital flows. b. flexible bilateral and cross exchange rates; independent, discretionary foreign exchange market interventions; open, liberalized markets for cross-border trade of merchandise and services. c. fixed bilateral and cross exchange rates; non-independent...

  • Which one of the following best explains how a hedge accomplishes its object to reduce or...

    Which one of the following best explains how a hedge accomplishes its object to reduce or eliminate exchange rate risk? Multiple Choice It creates a new receivable to match the foreign currency receivable. It eliminates the foreign currency receivable or payable. It creates a new receivable to match the foreign currency payoble. It creates a new payable to match the fore!lgn currency peayable

  • CASE THREE, ALEXANDER Inc. Sometimes in November Year 1 (Y1), Alexander Inc., a US based importer...

    CASE THREE, ALEXANDER Inc. Sometimes in November Year 1 (Y1), Alexander Inc., a US based importer of olive oil placed an order for 500 cases of olive oil at a price of 100 Euros per case. The pertinent exchange rates are given below. DATE             SPOT              FORWAR RATE                        CALL OPTION PREMIUM FOR                         RATE           (to January 31, Y2)                        1/31/Y2 (Strike price of $1) 12/1/Y1           $1.00                       $1.08                                                       $0.04 12/31/Y1         $1.12                       $1.20                                                       $0.12 1/31/Y2           $1.15                       $1.15                                                      ...

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT