Here is the synopsis of our sample research paper on Currency Swaps and the Swap Network. Have the paper e-mailed to you 24/7/365.
Essay / Research Paper Abstract
This 4 page paper is written in two parts. The first part looks at currency swaps, why and how they are used and why a company may choose to use a currency swap instead of issuing bonds in a different currency. The second part of the paper looks at the swap network which takes place between central banks and discusses how the failure of a major commercial bank could result in a swap crisis. The bibliography cites 4 sources.
Page Count:
4 pages (~225 words per page)
File: TS14_TEswaps.rtf
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Unformatted sample text from the term paper:
currency swaps. To understand why companies choose to use currency swaps we need to look at what currency swaps are and how they are of value.
Swaps are a relatively recent addition to range of derivative tools available for use by commercial institutions; the first one took place in 1981 between IBM and
the Wool Bank (Smithson et al, 1995). This is an agreement were the contracting parties make an agreement to swap different payment types, the payments are worked out by applying
some type of calculation, such as an interest rate, an exchange rate of an index, or the price of an underlying asset, which is applied to the principle.
For example one set of payments may be based on an exchange rate while the other is based in interest rates. Therefore there
is a reduction of exposure to one party and the transfer of risk to another. In currency swaps the calculation is based on the exchange rate and in foreign exchange
rate swaps there is a different to interest rate swaps as the principle is exchanged. Part b There are many reasons company might not simply choose to issue a
bond in the currency they would prefer to use to make the repayments. There are different conditions in different countries which can have an impact on the rates that would
be repayable on bonds. Example, if the company trades in country A, but wants to borrow funds to be used in Country B and make repayments in currency B then
it may make sense to issue a bond in country B, . However, this may not always be the most effective use of resources. Country B may have some negative
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