BANKING AFFAIRS

Detailed explanation-1: -An agreement to exchange future cash flows between two parties where one leg is an equity-based cash flow such as the performance of a stock asset, a basket of stocks or a stock index. The other leg is typically a fixed-income cash flow such as a benchmark interest rate.

Detailed explanation-2: -A swap is an agreement between two parties to exchange sequences of cash flows for a set period of time.

Detailed explanation-3: -A swap is a derivative contract through which two parties exchange the cash flows or liabilities from two different financial instruments. Most swaps involve cash flows based on a notional principal amount such as a loan or bond, although the instrument can be almost anything.

Detailed explanation-4: -Swap contracts are financial derivatives that allow two transacting agents to “swap” revenue streams arising from some underlying assets held by each party. Interest rate swaps allow their holders to swap financial flows associated with two separate debt instruments.

Detailed explanation-5: -Swaps : It is an agreement made between two parties to exchange cash flows in the future according to a prearranged formula.