Answer: pay-fixed, receive-floating JPY interest rate swap.

## Explanation Let's break down the components: **Target swap:** Receive-fixed USD, pay-floating JPY **Equivalent construction:** 1. **Receive-fixed USD, pay-fixed JPY currency swap** (this gives us fixed payments on both sides) 2. **Need to convert the fixed JPY payments to floating JPY payments** To convert fixed JPY to floating JPY, we need a **pay-fixed, receive-floating JPY interest rate swap**. **Why this works:** - The currency swap gives us: Receive fixed USD, pay fixed JPY - The interest rate swap gives us: Pay fixed JPY, receive floating JPY - Combined: Receive fixed USD, pay floating JPY (the fixed JPY payments cancel out) **Why not option B?** Option B (receive-fixed, pay-floating JPY) would give us floating JPY payments but we'd be receiving fixed JPY, which is not what we want. **Why not option C?** Option C deals with USD interest rates, but we need to convert JPY fixed to JPY floating.

Author: LeetQuiz Editorial Team