A swap that is used to evade the risk of exchange rate exists because of currency mismatching is classified as __________?
Correct answer: C. currency swaps
- A. floating swaps
- B. fixed swaps
- C. currency swaps
- D. notion swaps
Explanation
A currency swap exchanges cash flows denominated in different currencies, helping parties manage exchange-rate exposure caused by currency mismatching. Floating and fixed describe payment terms, not the currency-risk purpose itself.
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