A forward/forward FX swap:
A) is a contract by which the maturity of a regular FX swap can be extended at an historic (noncurrent) rate
B) is a swap transaction where the near leg is traded either value today or value tomorrow and the far leg is traded spot
C) is a swap that does not start spot and where both the near and the far leg are traded forward
D) is a transaction by which a maturing outright forward FX is prolonged at an historic (non-current) rate

Question

Quizplus · Accepted Answer

A forward/forward FX swap is a swap transaction where both the near and far legs are traded forward, meaning they are both settled at a future date. It differs from a regular FX swap where the near leg is settled spot or within a short period of time and the far leg is settled forward. Therefore, choices A, B, and D are incorrect.

A Forward/forward FX Swap