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Derivatives




Coupon Swap


An ordinary fixed-floating interest rate swap. In this swap, one party pays the fixed rate and the other pays the floating rate in specified intervals (coupon periods) over the life of the swap. The buyer of the swap pays fixed and receives floating, while the seller pays floating and receives fixed.

A coupon swap involves no cash changing hands at inception and hence it is a par 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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