Which of the following is false?
A)Currency swaps can be used to hedge against exchange rate risk over a multiyear period.
B)Swaps are an example of derivatives and hence are always used to speculate.
C)Currency swaps initially developed to get around regulations that limited capital flows among countries.
D)Currency swaps involve trading a set of payments in one currency for a set of payments in a different currency.

Question

Quizplus · Accepted Answer

While swaps can be used for speculation purposes, they are not always used for that purpose. Swaps can also be used for hedging purposes, as in the case of currency swaps used to hedge against exchange rate risk.

Which of the Following Is False