What is a swap?
A swap is a financial transaction in which two parties contractually agree to exchange cash flows at a future time.
Characteristics of swaps
It aims to hire this kind of financial derivatives, is largely mitigate any currency fluctuations and / or interest rates. Are often used to avoid the risk associated with granting a loan or credit (eg establishing a fixed rate to avoid severe fluctuations in the rates upward, can lead to insolvency of the debtor) to the underwriting of fixed income or currency exchange rate.
Who does it?
Any business entity.
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