Cross-Currency Basis Swaps

A cross-currency basis swap is *most commonly* used to effectively obtain a foreign loan with all of the following benefits, _except_:

Correct! There is still interest rate risk with most cross-currency basis swap, since both sides are often based on a floating rate.

Incorrect. This is a valid benefit from a cross-currency basis swap. The point of entering into such a swap after borrowing locally instead of simply taking out a foreign loan is to get less expensive financing, even after any difference from the basis.

That's not right. This is a valid benefit from a cross-currency basis swap. Since notional values in both currencies are exchanged at the start and end of the swap, there is no risk of disadvantageous foreign exchange movements to worry about.

no interest rate risk.

no foreign exchange risk.

lower borrowing costs.