A foreign currency swap is simply an agreement between two parties to exchange one currency for another currency (Invoice Value) Select one: True False

Which of the following refers to exposure netting?  1. It is a strategy based on adjustments of the times of payments that are made in foreign currencies. 2. It is a practice which implies using swap contracts that have a fixed currency exchange rate. 3. It is a method of hedging transaction risk by offsetting exposure in one currency with exposure in the same or another similar currency. 4. It is a strategy that involves using two distinct assets with positively correlated price movements where the investor takes opposing positions in each investment in an attempt to reduce the risk of holding just one of the securities.

Exchange rate is:Select one:a. All of the given answers.b. The rate at which one currency can be exchanged for another.c. Not defined in AASB 121.d. The difference between the currency rates.

A foward exchange transactions involve ____________ exchange of foreign currencies at  ________ rate.   Question 21 options:   1)  immediate, predetermined   2)  immediate, spot   3)  future, predetermined   4)  future, spot

What is a convertible currency?

Evaluate the arbitrage opportunity with the triangular arbitrage methods for the following currency pairs and identify the preferred direction of trade   AUDPLN   BRLPLN   AUDBRL   Bid   2.7613   0.9453   2.9745   Ask   2.7624   0.9466   2.9748

A major risk faced by a swap dealer is exchange rate risk. This is   a)the probability exchange rates will move against the dealer.   b)the probability that a foreign counterparty will default in a currency swap.   c)none of the options   d)the probability that either counterparty defaults in a currency swap.

Factors that determine the value of a currency (exchange rate).

Based on IMF's "de facto classification" on exchange rate regime, a currency that is mainly market-determined is classified as: a. conventional fixed peg. b. market arrangement. c. floating arrangement. d. currency board arrangement.

a)explain the structure of a pay-fixed, receive-fixed currency swap, and describe the cash flows at its initiation date, settlement dates, and termination date.     b)explain how to determine the notional amounts in two currencies in a currency swap.       c)explain the equivalency between a currency swap and a pair of bond transactions in different currencies.       d)describe the four types of currency swaps.       e)describe the relationship between currency swaps and interest rate swaps.