Question
Which of the statement below about currency swaps is NOT TRUE? Select one: a. All currency swaps have an NPV of zero when the contract
Which of the statement below about currency swaps is NOT TRUE? Select one:
a. All currency swaps have an NPV of zero when the contract is signed.
b. None of the above. All of the statements are true.
c. The differences in borrowing costs due to credit risk give rise to comparative advantage in borrowing through swaps.
d. When an intermediary is involved in a swap, the intermediary assumes the counterparty risk for both ends of the transaction.
e. Both counterparties can benefit from a swap even if one counterparty has the comparative advantage in all types of borrowing.
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