Derivatives

Knock-Out Swaption

August 7, 2021
Derivatives

Double Knock-Out Option

August 8, 2021

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A bond swap that aims to diversify a portfolio by bond type, sector, or geographic region (country-wise, region-wise, etc.). For example, the swap may entail replacing part of the bond holdings relating to American issuers with bond holdings relating to European or Japanese issuers. The diversification process may be static (period-specific) or dynamic in instant reaction to market realities.

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