"Swaps: Swaps are private agreements between two parties to exchange cash flows in the future according to a prearranged formula. They can be regarded as portfolios of forward contracts. The two commonly used swaps are : - Interest rate swaps: These entail swapping only the interest related cash flows between the parties in the same currency. - Currency swaps: These entail swapping both principal and interest between the parties, with the cash flows in one direction being in a different currency than those in the opposite direction. Source: http://in.docsity.com/en-docs/Introduction_to_Derivatives_-_Security_Analysis_and_Portfolio_Management_-_Solved_Quiz_"
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