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a)Forward, futures, and option contracts had been used by FIs to hedge risk for many years before swaps were invented. If FIs already had these
a)Forward, futures, and option contracts had been used by FIs to hedge risk for many years before swaps were invented. If FIs already had these hedging instruments, why did they need swaps? Justify your answer. (8 marks) b) How is selling a credit forward similar to buying a put option? Explain with an example (7 marks)
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