Introduction to Swap
- A swap is an agreement between two parties to swap cash flows in the future
- The arrangement covers swaps on multiple dates
- Futures or forwards can be considered as a simple example of a swap where there is a cash flow exchange on one particular date
- Most common swaps are Interest Rate Swaps (IRS) and currency swaps
- The legal agreement in which the two parties enter is called a confirmation, which covers the termination date, calendar used, rates of payment, day count conventions etc.
- This is only a practice test, it is designed to help you revise your concepts
- The test contains questions, only 1 option is correct for each question
- This is a timed test.
- After you have finished the test, press on the 'Finish Test' button to know your score and get the correct answers