The action which an investor takes by entering into an interest rate swap in order to offset an exposure to a floating rate note or a reverse floating rate note that has begun to move unfavorably, that is, downward. This situation may also be that of an issuer entering an offsetting transaction when the rate is moving upward.
Derivatives
Derivatives have increasingly become very important tools in finance over the last three decades. Many different types of derivatives are now traded actively on ...
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