YOU ASK:
What is the definition of Swaps?
WE ANSWER:
Swaps refer to the trading (exchange, selling and buying) of various securities from among investors. These investors agree to exchange, sell or buy a security that is posed to mature at a certain time, for another similar bond that will mature at a different time.
Swaps may be made to account for a change in investment goals or to change the maturities in the bond portfolio. The goal is to leverage the changes in risk, interest rate, marketability, maturity and even for its tax implications.
Swaps enable an investor to generate capital, while at the same time enjoy a tax write-off. There are also bonds that perform poorly that can be unloaded via swaps.
Was this insurance question and its answer useful?
| Not a bit | Very useful |
Have an Insurance Question? Ask For Insurance
More insurance terms around swaps:
- Tax Sheltered Annuity (TSA)
- Tax-Deferred Basis
- Ten-Day Free Look Provision
- Term Certain Annuity
- Term Life Insurance
- Territorial Rating
- Terrorism Coverage
- Third-Party Administrator
- Third-Party Coverage
- Time Deposit
- Surrender Cost Comparison Index
- Surrender Charge
- Surplus Lines
- Surplus
- Surety Bond
- Supplemental Coverage
- Superfund
- Suicide Exclusion Provision
- Substandard Risk Class
- Substandard Premium Rates