Currency swap

Brief illustration of a fixed-for-fixed currency swap (e.g., dollars for euros). Please note: in a plain vanilla interest rate swap, we referred to the NOTIONAL because it is not exchanged (in that case, the notional is required only to compute the interest). However, in a currency swap the PRINCIPAL is exchanged.

Category:

Education

Tags:

• Finance
• Derivatives
• Swaps

[pantherenebuleuse]

ladies and gentlemen, the greatest man on Youtube

[sandmothtube]

What did he say ???, LOL

[lcvd1]

@raala12 It seems illegal!

[TheGautamj]

Thanks so much! Really appreciate it, David!

[lukegranger89]

@Woutchitsou yeah law students are usually dumbasses when it comes to anything remotely technical scientific or mathematical since it involves logic and not bullshit

[raala12]

@Woutchitsou Say company A which is a US based company doing business in Europe. Company B which is a europe based company doing business in US. Company A can raise funds easily in USD as they are US based ,but they need euro s they are doing business in Euro. Company B can easily raise money in euro as they are Europe based but they need USD as they are doing business in US. So this is the product suits them.

[MrBigEnchilada]

subscribe!!!!

[svtuition]

Great lecture

[Woutchitsou]

My question was complicated for no reason...i will make it way simpler. What are the motives to be doing a currency swap ?

[Woutchitsou]

I am totaly new to finance, im a law student taking a business financing class and i have a question. If i understand well, the currency swap is simply an interest swap that can be done under another currency so companies can potentially profit from interest rate variation in other countries ? The only advantage of this is to make it possible for interest rate swaps to become international ? Is that it ? And if it is, is it really worth it there must be a fat fee for principal exchange no ?

[RANIASLD]

Excellent and Thanks a lot.

Do you have any more videos on different topics?

I would be certainly interested to learn and benefit.

Thanks again,

Rani