Manage foreign exchange exposure

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Reference no: EM131998006

1. a) When should a company use the following to manage foreign exchange exposure:

i. interest rate swap; ii. Currency swap; and iii. Interest rate/currency swap?

b) Suppose a U.S. corporation wants to secure fixedrate funds in pounds to reduce its pound exposure, but is hampered in doing so because it is a relatively unknown credit in the British financial market. In contrast, a British company that is well established in its own country may desire floatingrate dollar financing, but is relatively unknown in the U.S. financial market. What is the most appropriate form of swap for these two parties? Why?

Reference no: EM131998006

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