FINANCIAL SWAPS

Suk H. Kim

Chapter 6 in Global Corporate Finance:A Focused Approach, 2023, pp 137-154 from World Scientific Publishing Co. Pte. Ltd.

Abstract: A swap is an agreement between two parties, called counterparties, who exchange sets of cash flows over a period of time in the future. When exchange rates and interest rates fluctuate, the risks of forward and money market positions are so great that the forward market and the money market may not function properly. Currency futures and options are inflexible and available only for selected currencies. In such cases, multinational companies (MNCs) and governments may use swap arrangements to protect the value of export sales, import orders, and outstanding loans denominated in foreign currencies…

Keywords: Global Finance; International Finance; International Financial Management; International Accounting; International Business; International Business Finance; Foreign Trade; International Economics; Foreign Exchange; International Corporate Finance; Multinational Finance; International Taxation (search for similar items in EconPapers)
JEL-codes: F F21 F23 F3 F30 F31 G3 (search for similar items in EconPapers)
Date: 2023
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