An exotic swap in which either of the two legs is (or both are) based on an illiquid index and hence a proxy is used to offer some estimation of a given underlying rate. For example, as a structured energy derivative product, a proxy swap can be based on Japan crude-oil cocktail and some other liquid energy index.
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 ...
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