Interest rate swaps revolutionize hedging and speculation in financial markets.
Interest rate swaps are a financial tool used to manage risk and improve returns on investments or debt. They work by allowing investors and borrowers to exchange interest rate payments. Swaps are commonly used in financial markets and can help protect against interest rate changes or take advantage of them. The study explores how standard interest rate swaps, forward swaps, and swaptions are used, priced, and traded in the market.