Answer Posted / samson pailo
A swap is a derivative in which two counterparties agree to
exchange one stream of cash flows against another stream.
The swap agreement defines the dates when the cash flows are
to be paid and the way they are calculated. Swaps can be
used to hedge certain risks such as interest rate risk, or
to speculate on changes in the expected direction of
underlying prices.
| Is This Answer Correct ? | 13 Yes | 6 No |
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