A swap which is typically used to hedge the risk associated with the issuance of a dual currency bond. It has an embedded option and other elements to transfer the unwanted risk of the dual currency bond from the issuing entity to a financial intermediary. In turn, the financial intermediary may disaggregate and repackage the risk elements in order to distribute them across many risk-taking investors.
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 ...
Watch on Youtube
Comments