What is swap?

Answer Posted / ashish

hello mr dashing take ur ans from me
Exchange of one type of asset, cash flow, investment,
liability, or payment for another. Common types of swap
include: (1) Currency swap: simultaneous buying and selling
of a currency to convert debt principal from the lender's
currency to the debtor's currency. (2) Debt swap: exchange
of a loan (usually to a third world country) between banks.
(3) Debt to equity swap: exchange of a foreign debt
(usually to a Third World country) for a stake in the
debtor country's national enterprises (such as power or
water utilities). (4) Debt to debt swap: exchange of an
existing liability into a new loan, usually with an
extended payback period. (5) Interest rate swap: exchange
of periodic interest payments between two parties (called
counter parties) as means of exchanging future cash flows


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