discuss the motives a company may have for engaging in currency and intrest rate swaps

Q: Explain the foreign currency swaps and why are they undertaken? Explain the functional currency and…

A: A foreign currency swap, also known as an FX swap, is an agreement between two foreign parties to…

Q: What is National Savings Certificate? A. Short-term U.S. government debt obligation B. A fixed-…

A: The correct answer is B. A fixed-income investment scheme:One such investment product that the…

Q: Discuss well about the exchange Rate Mechanisms of currencies; what does it mean  “Independent…

A: Answer:-  Currency meaning:- The public uses currency, an officially recognized type of money, for…

Q: rence rat

A: Introduction :  In simple words, Reference rate can be understood as the rate that is utilized to…

Q: Indirect Intervention How can a central bank use indirect intervention to change the value of a…

A: Central bank can use indirect intervention to change the value of the currency by making necessary…

Q: How do the central banks implement expansionary monetary policy using monetary policy tools?…

A: Solution Step (1) Expansionary Monetary Policy The expansionary fiscal policy works by increasing…

Q: What is the difference (Who can invest?) between Money Market, Bond Market, Equity Market, Foreign…

A: The money market is the part of the financial market that invests in short-term debt with low risk…

Q: Describe what is meant by the virtualization of traditional trade finance instruments.

A: First of all we need to understand what is Trade Finance Instruments: It is a payment instrument and…

Q: Discuss the key differences between the operation of a currency forward market and a  futures…

A: Foreign exchange, also known as Forex or FX, is the process of converting one currency into another…

Q: Identify under which one of the following market the issue of treasury bills lies: a. Foreign…

A: Foreign Currency Market- It is an over-the counter marketplace where participants buy, sell,…

Q: efly explain how banks can optimize their position through managing their use of currencies?

A: Step 1   Significant restructuring of the treasury structure and the way companies interact with…

Q: Define currency appreciation

A: Answer: The meaning of currency appreciation is nothing but an rise of one currency’s value…

Q: 1. What is the optimum currency area? 2. What is the specie-flow mechanism?

A: Standard disclaimer-Hi there, Thanks for posting the questions. As per our Q&A guidelines, must…

Q: A foreign currency loan is a typical example for   O a. Currency Risk   O b. Interest rate risk…

A: A foreign currency loan is one in which you borrow money in a foreign currency, such as Swiss…

Q: 2. How fixed exchange rate system of UAE is managed? Show this for both surplus and deficit balance…

A: The exchange rate system explains how the exchange rate determines in respect of the other nation's…

Q: Distinguish between the spot market and forward market for foreign exchange.

A: The objective of this question is to differentiate between the spot market and the forward market in…

Q: Which of the following is the risk due to exchange rates?      Business risk     Financial risk…

A: The investments that we make in debt, equity and other financial securities are exposed to different…

Q: Which of the following is a matured money market instrument widely used in the USA, Europe and Asia…

A: Money market instruments are commonly used every where due to high liquidity and safe return.

Q: Which of the following is part of the payments system of the economy? A. currency B. demand deposits…

A: A payment system is any mechanism that settles banking transactions by transferring monetary value.…

Q: How do companies report foreign currency derivatives, such as forward contracts and options, on the…

A: Currency derivatives refers to the financial contracts involving two parties, buyer and seller which…

Q: What are some of the transactions or activities that results in the demand of foreign currency

A: In an economy or in a country there are different economic and commercial transactions that lead to…

Q: What is the difference (financial instruments traded) between Money Market, Bond Market, Equity…

A: Financial markets encompass any marketplace where securities are traded, such as the stock market,…

Q: Compare and contrast transaction exposure and economic exposure

A: SOLUTION:- Transaction exposure is the danger a MNC faces when it executes a particular exchange…

Q: Explain what a currency instrument is? Give examples of such currency instrument

A: Currency Instrument - Currency Instruments are those Instrument which is used globally for the…

Q: Define each following terms: p. American depository receipts (ADRs); repatriation of earnings

A: “Since you have asked multiple questions, we will solve the first question for you. If youwant any…

Q: Currency swap mostly means   O a. Exchanging interest rates   O b. Swapping currency cashflows…

A: A swap is a financial derivative arrangement in which two parties swap cash flows or liabilities…

Q: Do you think Balance of Payment and its different components have any role in determining the…

A: Balance of Payments: It is the difference in the money flowing in the country & the money…

Q: Demonstrate how interest rate and currency swaps are constructed and discuss the comparative…

A: Two parties can exchange cash flows based on various interest rates or currencies using financial…

Q: explain what economists attribute so much attention to Real Exchange Rates? Provide an answer that…

A: Exchange rates are the rates in which one currency could be exchanged into the currency of another…

Q: Explore the concept of arbitrage on the currency exchange markets and critically evaluate with…

A: Arbitrage is the practice of purchasing and selling an item in numerous markets at the same time in…

Q: w can the company use currency futures contracts to hedge against exchange rate risk?

A: A future contract is an agreement to buy or sell the underlying asset on a specified future date and…

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

A: The value of a currency, or its exchange rate, is influenced by various economic, political, and…

Q: Describe the widely used currency derivatives.

A: Currency Derivatives: These are the contracts that generate their value from their underlying…

Q: Explain the steps necessary to take advantage of an arbitrage opportunity, which may exist between…

A: When a future yen payment is due,you need to lock in a lower price for the yen.  Currency arbitrage…

Q: Under what conditions can companies use hedge accounting to account for a foreign currency option…

A: Hedge Accounting: Hedge accounting is a process which identifies gains or losses on hedging tools in…