Their financing at lower interest rates in markets

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Reference no: EM131066479

Swaps provide for more complete financial markets and help borrowers tailor their financing at lower interest rates in markets that might not be accessible to them. However swaps present risks.

• If you were the swap bank, discuss the 2 risks that you would consider to be the most important?

• Why is the expected loss from a default on a swap less than the expected loss from the default on a loan with the same principal?

Reference no: EM131066479

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