Arbitrage, Speculation and Hedging Term Paper

Open, View, and/or
Download this Document

Total Length: 358 words ( 1 double-spaced pages)

Total Sources: 3

International Finance

According to Investopedia, interest rate swaps are OTC-traded contracts between two parties, whereby the two parties agree to exchange the future interest payments related on a principal amount

This exchange usually implies that the parties exchange a fixed payment for a floating payment, in other words, a fixed interest rate for a floating interest rate. While this is the most current form of interest rate swap, all the other combinations of fixed vs. floating (floating for floating and fixed for fixed, as well as floating for floating with different currencies) are also present in such exchanges.

Stuck Writing Your "Arbitrage, Speculation and Hedging" Term Paper?

View All Our Example Arbitrage, Speculation and Hedging Term Paper

Have A Custom Example Essay Written



As mentioned, one of the most common forms of interest swaps is the fixed-for-floating rate swap. In this situation, one of the parties pays its fixed interest rate to the other party. In exchange, the first party receives the floating rate, which is usually an interest calculated around a reference rate, such as LIBOR or EURIBOR (of the type LIBOR + 1%, for example). The former is called the payer, while the latter is called the receiver.

As a consequence of….....

     Open the full completed essay and source list


OR

     Order a one-of-a-kind custom essay on this topic


sample essay writing service

Cite This Resource:

Latest APA Format (6th edition)

Copy Reference
"Arbitrage Speculation And Hedging" (2014, October 13) Retrieved July 1, 2025, from
https://www.aceyourpaper.com/essays/arbitrage-speculation-hedging-192675

Latest MLA Format (8th edition)

Copy Reference
"Arbitrage Speculation And Hedging" 13 October 2014. Web.1 July. 2025. <
https://www.aceyourpaper.com/essays/arbitrage-speculation-hedging-192675>

Latest Chicago Format (16th edition)

Copy Reference
"Arbitrage Speculation And Hedging", 13 October 2014, Accessed.1 July. 2025,
https://www.aceyourpaper.com/essays/arbitrage-speculation-hedging-192675
   

Open, View, and/or
Download this Document
order custom essay example