Re: Swaps
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Ratan Gupta, FRM
Feb 11, 2010, 4:07:39 AM2/11/10
to KV CFA L1 June 2010
Only in currency swaps, exchange of notional takes place, for all
other swaps there is no exchange of notional.
This is because an unfavorable movement of exchange rate will result
in loss for one party.
The exchange happens 2 times, first at inception and then at the
expiration/termination of the contract.
Currency swaps have the highest counterparty risk because the notional
amount is large.
other swaps there is no exchange of notional.
This is because an unfavorable movement of exchange rate will result
in loss for one party.
The exchange happens 2 times, first at inception and then at the
expiration/termination of the contract.
Currency swaps have the highest counterparty risk because the notional
amount is large.
Thanks
Ratan
On Feb 11, 12:04 pm, Geetha Vramani <vramani.gee...@gmail.com> wrote:
> Hi Ratan,
>
> In single currency swaps - Is notional principal exchanged even once
> or not exchanged at all?
>
> Thanks,
> Geetha
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