Filter by Categories
Accounting
Banking

Derivatives




Credit Arbitrage Swap


An interest rate swap in which two counterparties exchange their credit comparative advantages (in terms of credit rating or creditworthiness) each in its own market. Thus, an arbitrage between the two markets is made to the benefit of both exchanging companies. However, the existence of an arbitrage possibility should be evaluated taking into account all relevant risks associated with the swap, such as liquidity, taxation, legal, and default risks, among others.



ABC
Derivatives have increasingly become very important tools in finance over the last three decades. Many different types of derivatives are now traded actively on ...
Watch on Youtube
Remember to read our privacy policy before submission of your comments or any suggestions. Please keep comments relevant, respectful, and as much concise as possible. By commenting you are required to follow our community guidelines.

Comments


    Leave Your Comment

    Your email address will not be published.*