Currency swaps are often used to provide long-term financing in foreign currencies but NOT because
A)long-term capital markets are not well developed
B)long-term forward foreign exchange markets are absent
C)of high foreign taxes
D)long-term capital markets are easily accessible

Question

Quizplus · Accepted Answer

Currency swaps are not used to avoid high foreign taxes; they are primarily used to manage currency risk and access foreign capital markets where long-term forward markets may be absent or underdeveloped.

Currency Swaps Are Often Used to Provide Long-Term Financing in Foreign