
C h a p t e r
Chapter ObjeCtives
8
Financial Swaps
After studying this chapter, you should be able to:
1 Review the importance of financial swaps as risk management tools as well as profit-
generating strategies.
2 Explain the concept of financial swaps and trace their evolution.
3 Understand various types of interest rate swaps and highlight the role of the
intermediary in interest rate swap deals.
4 Explain the concept of forward rate agreement.
5 Highlight the importance of other derivative products like swaptions, caps, floors,
and collars.
6 Explain the nature and importance of currency swaps.
7 Understand the nature of foreign ...