CFA Practice Question

There are 253 practice questions for this study session.

CFA Practice Question

Select the correct statement(s):

I. A FX swap deal effectively results in no (or very little) net exposure to the prevailing spot rate.
II. A FX swap is a two-legged currency transaction used to shift or "swap" the value date for a foreign exchange position to another date.
III. In a FX swap, the amount of repayment is fixed at the FX forward rate as of the start of the contract.
Correct Answer: I, II and III

I. Although the first leg opens up spot market risk, the second leg of the swap immediately closes it down.
III. FX swaps can be viewed as FX risk-free collateralised borrowing/lending.

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