Angela, a new investor, has contacted you with a question about the swap market. Provide a response

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Angela, a new investor, has contacted you with a question about the swap market. Provide a response to her question: “A swap agreement allows two companies to swap payments. Presumably, both parties believe that this agreement will make them better off. If the markets are efficient, how can a swap make both participants better off?” Answer this with respect to both interest rate and currency swaps.

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Introduction To Corporate Finance

ISBN: 9781118300763

3rd Edition

Authors: Laurence Booth, Sean Cleary

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