Interest rate swap transactions may be used by a multinational corporation as part of a funding strategy to:
A) lower the cost of borrowing, using a comparative advantage in a particular debt market.
B) spread debt issues across a range of currencies.
C) diversify funding sources across a range of debt markets.
D) all of the given answers.

Question

Quizplus · Accepted Answer

Interest rate swap transactions can achieve all of the goals mentioned in the choices, hence all of the given answers are correct. The multinational corporation can use an interest rate swap to take advantage of a lower borrowing rate in a particular market, spread its debt across different currencies, and diversify funding sources across various debt markets.

Interest Rate Swap Transactions May Be Used by a Multinational