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Derivatives




Accumulation Swap


An interest rate swap whereby the notional principal amount grows over its time to expiration. Such a swap is particularly fitting in a case where a fixed-rate payer has expanding working capital requirements. The accumulation swap has a wide variety of names, including: appreciating swap, construction loan swap, escalating swap, escalating principal swap, drawdown swap, staged drawdown swap, accreting swap, set-up swap, and accreting principal swap.



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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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