Swaps Flashcards
1
Q
swap
A
Traditionally, the exchange of one security for another to change the maturity (bonds), quality of issues (stocks or bonds), or because investment objectives have changed. Recently, swaps have grown to include currency swaps and interest rate swaps.
2
Q
notional amount
A
amount of the item controlled by the contract.
3
Q
swap spread
A
The difference between the negotiated and fixed rate of a swap. The spread is determined by characteristics of market supply and creditor worthiness.
4
Q
deferred swap
A
Only the payment is deferred, so the goods come today.
