The CEO of a corporation owns 100 million shares of his companys stock, which is currently priced

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The CEO of a corporation owns 100 million shares of his company’s stock, which is currently priced at €30 a share. Given the tremendous exposure of his personal wealth to this one company, he has decided to sell 10% of his position and invest the funds in a floating interest rate instrument. A derivatives dealer suggests that he do so using an equity swap. Explain how to structure such a swap.

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Derivatives

ISBN: 9781119850571

1st Edition

Authors: CFA Institute

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