As a foreign exchange hedge, currency swaps have all of the following characteristics EXCEPT
A. an initial exchange by two parties of two principal amounts in two different currencies.
B. principal amounts are reversed at the spot rate at maturity.
C. each party pays the others interest payment.
D. principal amounts are reversed at a pre-agreed rate at maturity.
Answer:B
As a foreign exchange hedge, currency swaps have all of the following characteristics EXCEPT
A. an initial exchange by two parties of two principal amounts in two different currencies. B. principal amounts are reversed at the spot rate at maturity. C. each party pays the others interest payment. D. principal amounts are reversed at a pre-agreed rate at maturity.