A spot sale of a currency combined with a forward repurchase of the same currency is called which one…
A Foreign Exchange Swap (Forex swap) is a simultaneous transaction combining a spot sale (or purchase) of a currency with a forward repurchase (or resale) of the exact same…
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A spot sale of a currency combined with a forward repurchase of the same currency is called which one of the following?
Answer and explanation
Correct answer A
A Foreign Exchange Swap (Forex swap) is a simultaneous transaction combining a spot sale (or purchase) of a currency with a forward repurchase (or resale) of the exact same currency in a single contract with the same counterparty. It allows institutions to temporarily obtain foreign currency liquidity while fully hedging exchange rate risk.
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UGC NET Commerce