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    Currency swap is a method of
    Question



    Currency swap is a method of

    A.

    Hedging against foreign exchange risk

    B.

    Speculating in foreign exchange

    C.

    Leverage instrument used by cooperative banks

    D.

    Mode of payment in international trade

    Correct option is A

    A currency swap is a derivative instrument used to hedge foreign exchange risk. It involves exchanging principal and interest payments in one currency for equivalent payments in another currency, helping firms mitigate risks from exchange rate fluctuations.

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