Cryptocurrency Q&A
Who are counterparties in swaps?
Who are counterparties in swaps?
Isabella
Mon Aug 26 2024
|
6 answers
946
Can you please elaborate on the concept of counterparties in swaps? In a financial transaction such as a swap, who exactly are the counterparties involved, and what are their respective roles and responsibilities? Are there any specific requirements or qualifications that need to be met in order to become a counterparty in a swap agreement? Additionally, how does the identification and selection of counterparties impact the overall risk and success of a swap transaction?
6 answers
DigitalCoinDreamer
Wed Aug 28 2024
Despite their differing payment obligations, both parties share a common objective in engaging in this swap: to hedge against potential interest rate risks or to exploit market inefficiencies.
Was this helpful?
47
60
InfinityRider
Wed Aug 28 2024
In the realm of financial derivatives, an interest rate swap represents a contractual agreement involving two distinct parties.
Was this helpful?
214
29
Moonshadow
Wed Aug 28 2024
Each of these parties assumes a distinct role in the swap, contributing to its fundamental structure.
Was this helpful?
379
75
lucas_emma_entrepreneur
Wed Aug 28 2024
One party, known as the fixed-rate payer, bears the responsibility of making payments at a predetermined, unchanging rate.
Was this helpful?
150
38
KiteFlyer
Wed Aug 28 2024
Conversely, the second party, referred to as the floating-rate payer, is tasked with making payments that are tied to a variable, market-driven rate.
Was this helpful?
113
67
Load 5 more related questions
