Floating-for-floating currency swaps
A)have reference rates that are different for the different currencies (e.g.,dollar LIBOR versus euro LIBOR).
B)have reference rates that can be the same but have different frequencies.
C)have reference rates that are different for the different currencies (e.g.,dollar LIBOR versus euro LIBOR),and the reference rates can be the same but have different frequencies.
D)none of the options

Question

Quizplus · Accepted Answer

Floating-for-floating currency swaps can have reference rates that are different for the currencies involved (e.g., dollar LIBOR versus euro LIBOR), but they can also have the same reference rate with different frequencies. For example, one leg of the swap may reference the three-month LIBOR for one currency while the other leg references the six-month LIBOR for the other currency. Therefore, both options A and B are partially true, but C covers all possibilities. Option D is incorrect as there is a correct answer.

Floating-For-Floating Currency Swaps