The Role of Interest Rate Swaps in the Bond Market

The Role of Interest Rate Swaps in the Bond Market

In the final video of the series, Lindsey explains interest rate swaps in various examples including as a series of forwards, as bonds and as FRNs.
Overview

Interest rate swaps are derivatives. Like most derivatives, they allow users to alter risk exposure without making an investment. They are about moving risk rather than raising or investing capital. They also share similarities to a series of forwards and par bonds.

Key learning objectives:

  • What is an interest rate swap?

  • In what way are FRA similar/different to swaps?

  • In what way are swaps similar to par bonds?

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Summary
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Expert
Lindsey Matthews

Lindsey Matthews

Lindsey runs Perfordiant, an investment risk and performance consulting firm. He has worked in financial markets since 1992. Lindsey became an MD in fixed income and equities, ran a Risk function, and was on the management team of an Asset Management fintech business. Lindsey is now a Visiting Fellow at the Henley Business School, and resides on the board of CFA UK.

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