explain how to price a currency swap if either set of payments is at a floating rate.       b)explain how a currency swap can be used to convert a loan in one currency into a loan in another currency, and provide some reasons for doing so.       c)demonstrate that a currency swap contract is equivalent to a series of forward contracts.       d)explain how a currency swap can be used to hedge a stream of foreign cash flows.     e)define interest rate derivatives, and compare and contrast them against bond derivatives.

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
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a)explain how to price a currency swap if either set of payments is at a floating rate.
 

 

 

b)explain how a currency swap can be used to convert a loan in one currency into a loan in another currency, and provide some reasons for doing so.
 

 

 

c)demonstrate that a currency swap contract is equivalent to a series of forward contracts.
 

 

 

d)explain how a currency swap can be used to hedge a stream of foreign cash flows.

 

 

e)define interest rate derivatives, and compare and contrast them against bond derivatives.
 

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