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#asset-swap #finance #gale-using-and-tradning-asset-swaps
The performance of an MVA transaction is difficult to monitor because the notional of the swap on which the transaction is based changes daily as the dir ty price of the bond changes.
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owner: piotr.wasik - Using and Trading Asset Swaps - Giles Gale (Morgan Stanley), p8

onsequence, the ‘loan’ will be for a smaller amount and the s wap spread will be smaller (if the bond trades above par). This is the intuition f or the above relationship between par/par spreads and MVA spreads. Monitoring an MVA Swap <span>The performance of an MVA transaction is difficult to monito r because the notional of the swap on which the transaction is based changes daily as the dir ty price of the bond changes. This means that unlike the par/par transaction, the MVA spread on one day is not an in dication of the spread at which an investor can unwind a previ ous MVA transaction. As a cons



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