Fundamentals of Corporate Finance
Fundamentals of Corporate Finance
11th Edition
ISBN: 9780077861704
Author: Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Bradford D Jordan Professor
Publisher: McGraw-Hill Education
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Chapter 23.5, Problem 23.5BCQ
Summary Introduction

To discuss: Meaning of swap contract and its types.

Introduction:

Swap contract is an emerging derivative instrument, which is first introduced in the year 1981. The swap contract is an agreement to swap or exchange cash flows at specified intervals.

A swap dealer is an important part of the swap market because there is no standardized exchange to swaps, like futures. Hence, a swap dealer is any person who makes the market in swaps.

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