Title

Swaps

Document Type

Honors Capstone Project

Date of Submission

Spring 5-1-2009

Capstone Advisor

Thomas Barkley

Honors Reader

Donald Dutkowsky

Capstone Major

Finance

Capstone College

Management

Audio/Visual Component

no

Capstone Prize Winner

no

Won Capstone Funding

no

Honors Categories

Professional

Subject Categories

Corporate Finance

Abstract

Swaps are versatile financial derivatives that create contracts to exchange future cash flows. Throughout the last several decades the uses and importance of swaps have grown substantially. This document examines swaps from a historical perspective and includes a discussion on issues such as economic justification, industry standardization, market participation, and day-count conventions. Four main classifications of swaps are discussed: interest rate swaps, currency swaps, equity swaps, and commodity swaps. Interest rate swaps are by far the most common; however, each classification offers unique traits that demonstrate the versatility and efficacy of swaps as an asset class. Each class of swap will have a section devoted to its history, basic structure, pricing, valuation, and customization.


Creative Commons License

Creative Commons Attribution-Noncommercial-No Derivative Works 3.0 License
This work is licensed under a Creative Commons Attribution-Noncommercial-No Derivative Works 3.0 License.

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