Which of the following statements is correct when comparing

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Which of the following statements is correct when comparing the differences between an interest rate swap and a currency swap?

A. At maturity, there is no exchange of principal between the counterparties in interest rate swaps and there is an exchange of principal in currency swaps.

B. At maturity, there is no exchange of principal between the counterparties in currency swaps and there is an exchange of principle in interest rate swaps.

C. The counterparties in a interest rate swap need to consider fluctuations in exchange rates, while currency swap counterparties are only exposed to fluctuations in interest rates.

D. Currency swap counterparties are exposed to less counterparty credit risk due to the offsetting effect of currency and interest rate risk in the transaction.

Reference no: EM13569056

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