I'm trying to understand the concept of swap transfer. I've heard this term in financial transactions, but I'm not quite sure what it entails. Could someone explain what swap transfer means?
6 answers
Tue Jan 14 2025
A swap is a financial derivative agreement between two entities.
Tue Jan 14 2025
This contract involves the exchange of pre-arranged cash flows related to two distinct financial instruments.
Mon Jan 13 2025
The cash flows exchanged are typically calculated based on a notional principal amount.
Mon Jan 13 2025
The notional principal amount serves as a reference point for determining the cash flows and is not exchanged between the parties.
Mon Jan 13 2025
Each of the cash
Flow streams involved in the swap is referred to as a “leg.”