ESS. OF INVESTMENTS - ETEXT ACCESS CARD
ESS. OF INVESTMENTS - ETEXT ACCESS CARD
11th Edition
ISBN: 9781265909055
Author: Bodie
Publisher: MCG
Question
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Chapter 17, Problem 7CP
Summary Introduction

(A)

To evaluate:

Definition of Interest rate swaps and obligation of each party involved

Introduction:

Interest rate swaps are the most common method of hedging exposures to changes in the interest rate. An interest swap is an agreement between two parties to exchange one set of interest payments (or flows) for another in the same currency.

Summary Introduction

(B)

To evaluate:

How interest rate swap is used by fixed-income portfolio managers to control risk or improve return

Introduction:

Interest rate swaps are the most common method of hedging exposures to changes in the interest rate. An interest swap is an agreement between two parties to exchange one set of interest payments (or flows) for another in the same currency.

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