#asset-swap #finance
An asset swap enables an investor to buy a fixed rate bond and then hedge out the interest rate risk by swapping the fixed payments to floating. In doing so the investor retains the credit risk to the fixed-rate bond and earns a corresponding return.
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Asset swap - Wikipedia, the free encyclopediae chronology of the cash flows into line with that of the underlying bond.
Contents
1 Introduction
1.1 Mechanics of a Par Asset Swap
1.1.1 Computing the asset swap spread1.1.2 Market Asset Swap
2 See also3 References
Introduction[edit]
<span>An asset swap enables an investor to buy a fixed rate bond and then hedge out the interest rate risk by swapping the fixed payments to floating. In doing so the investor retains the credit risk to the fixed-rate bond and earns a corresponding return. The asset swap market was born along with the swap market in the early 1990s, and continued to be most widely used by banks which use asset swaps to convert their long-term fixed rate as Summary
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