Swap Valuation

swaps involve the sale of one security for another security, typically in the form of a swap agreement. Swaps can be classified into two categories: Inverse Swaps and Reverse Swaps.

Inverse swaps involve exchanging a security for another security with the intention of reducing or eliminating the risk associated with that particular security.

Reverse swaps involve exchanging a security for another security with the intention of amplifying or increasing the risk associated with that particular security.

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