Abstract: An equity swap is an agreement between two parties to exchange cash flows on regular future dates, where at least one of the payment legs depends on the value of a share or a portfolio of shares. The notional principal on the deal can be fixed or floating. Traders and investors can replicate long and short positions in shares by using equity swaps. In a credit default swap (CDS) the buyer of protection pays a premium to the seller of protection. The protection buyer receives a contingent payment depending on whether or not a defined credit event occurs which affects the referenced entity specified in the contract. The CDS premium depends on the probability that a credit event will occur and also on any money that can be recovered from the referenced entity if a credit event does occur.
Publication Year: 2012
Publication Date: 2012-01-02
Language: en
Type: other
Indexed In: ['crossref']
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Cited By Count: 1
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