Currency swaps are used to:
A) lock in an exchange rate for future delivery of a foreign currency.
B) effectively transform loans originated in one currency to a different currency.
C) transform fixed-rate loans into variable-rate loans.
D) exchange foreign currencies in amounts not possible in the foreign exchange market.

Question

Quizplus · Accepted Answer

Currency swaps are used to effectively transform loans originated in one currency to a different currency. This is done to take advantage of more favorable interest rates or to manage exchange rate risk.

Currency Swaps Are Used To