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Derivatives




Annuity Swap


An amortizing swap in which an irregular payment streak is exchanged for a regular payment flow of the same present value. To make both sets of flows equal, the swap notional principal should be adjusted over its time to maturity.

An annuity swap may also refer to a currency swap in which only interest or coupon payments are exchanged.

This swap is also known as a coupon only 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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