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Swap contracts??? (1 Viewer)

Michaelmoo

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Does anyone have an understanding on what a "swap contract" is? Its a tool that applies to both hedging and derivatives. I read about it in Cambridge and on Wikipedia but their explanations are a little hazy (or is it me?)

If someone could clarify I'd appreciate it.
 

the-derivative

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A swap contract is a contract between two parties that binds each party to pay periodic payments (such as payments on a bond), and receive periodic payments (such as payments on a bond).

To keep it simple it's an agreement between companies to swap bond payments. Also it's not on the syllabus. :)
 

Michaelmoo

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A swap contract is a contract between two parties that binds each party to pay periodic payments (such as payments on a bond), and receive periodic payments (such as payments on a bond).

To keep it simple it's an agreement between companies to swap bond payments. Also it's not on the syllabus.:)
Hmm. It didn't really explain why they swap periodic payments. But thats ok I found the answer! :D Here it is: http://www.msrb.org/MSRB1/glossary/view_def.asp?param=INTERESTRATESWAPCONTRACT

O and it falls under derivatives. True you don't need anything extensive on it. You could mention it though, but I had to understand what it is.

Thanks.

BTW What did you score on your trial? You seem pretty good at business:haha:
 
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the-derivative

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Hmm. It didn't really explain why they swap periodic payments. But thats ok I found the answer! :D Here it is: http://www.msrb.org/MSRB1/glossary/view_def.asp?param=INTERESTRATESWAPCONTRACT

O and it falls under derivatives. True you don't need anything extensive on it. You could mention it though, but I had to understand what it is.

Thanks.

BTW What did you score on your trial? You seem pretty good at business:haha:
No problems, sorry I didn't fully answer your question.

Haha thanks. I got 95 in my trials - but I lost 4 marks because I ran out of time for the report and 1 on MC.
 

Michaelmoo

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No problems, sorry I didn't fully answer your question.

Haha thanks. I got 95 in my trials - but I lost 4 marks because I ran out of time for the report and 1 on MC.
Good job and good luck with that state rank. Sure your capable.
 

lyounamu

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if it's not on the syllabus, will questions regarding swap contract appear later?
hmmm

swap contract is one type of derivate along with forwards/futures and option.

So it's technically part of the syllabus...

To answer your question, if it's not on syllabus, it is not supposed to be in exam.
 

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