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One company agrees to pay to another company cash flows equal to interest at a predetermined fixed rate on a notional principal for a predetermined
One company agrees to pay to another company cash flows equal to interest at a predetermined fixed rate on a notional principal for a predetermined number of year in exchange of payments interest payments at a floating rate on the same notional principal for the same period of time. This is true for the following type of swap
a. | Total return swap | |
b. | Debt-equity swap | |
c. | Currency swap | |
d. | Interest rate swap |
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