What is an FX swap?
A) An exchange ot two streams of interest payments in different currencies and an exchange of the principal amounts of those currencies at maturity
B) A spot sale (purchase) and a forward purchase (sale) of two currencies agreed simultaneously between two parties
C) An exchange of currencies on a date beyond spot and at a price fixed today
D) None of the above

Question

Quizplus · Accepted Answer

An FX swap involves a spot sale (or purchase) of a currency and a simultaneous forward purchase (or sale) of the same currency, effectively exchanging two currencies for a set period and reversing the transaction at a future date.

What Is an FX Swap