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Which are the reasons for a firm to engage in currency, interest rate, and other swap contracts? a. The firm wants to lower its hedging
Which are the reasons for a firm to engage in currency, interest rate, and other swap contracts? a. The firm wants to lower its hedging costs by minimizing its exposure to currency exchange rate risk and interest rate risk. b. The firm may use fixed-for-floating interest rate swap contracted because it wants to align the returns from its assets with the payments on its liabilities. c. An inefficiency in the global credit markets may provide a firm a comparative advantage to borrow money in a different currency and then engage in an interest rate swap to lower its borrowing costs and avoid currency exchange rate risk. d. All of the above (a, b, c) are valid reasons for firms to engage in swap contracts. e. None of the above, except c, are valid reasons for firms to transact swap contracts
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