The difference between this and borrowing in the foreign currency is that interest is paid in the domestic currency instead of the foreign currency.

问题如下：

Suppose there is a cash need for one year in a foreign currency. Explain how a company can borrow domestically and use an FX swap to fund the cash need. What is the difference between that and borrowing funds in the foreign currency to fund the cash need?

选项：

解释：

When the company borrows domestically, an FX swap can convert the borrowing to the foreign currency at the beginning of the loan and back to the domestic currency at the end of the loan. The difference between this and borrowing in the foreign currency is that interest is paid in the domestic currency instead of the foreign currency.