Currency swaps can be designed to reduce foreign exchange risk.

Name: Currency swaps can be designed to reduce foreign exchange risk.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

Currency swaps involve exchanging cash flows in different currencies, which can help to mitigate foreign exchange risk for both parties involved in the swap agreement. By exchanging cash flows at a predetermined exchange rate, companies can lock in a rate for future payments and protect against fluctuations in currency values.

Currency Swaps Can Be Designed to Reduce Foreign Exchange Risk