TDS- INTEREST ON BANK DEPOSITS

Jun 28th, 2015
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Abilene Christian University
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Interest rate swaps are a common type of derivative security, which simply means that their value is “derived” from underlying assets (in this case, loans and interest rates). In a swap, two parties agree to exchange two streams of cash flow; in an interest rate swap, these cash flows are the interest payments for some given amount of money. The underlying money, known in this context as the notional amount, doesn't necessarily change hands. The two parties just exchange the interest payments they would make if they had actually borrowed the notional amount.

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Interest rate swaps are a common type of derivative security, which simply means that their value isderived from underlying assets (in this case, loans and interest rates). In a swap, two parties agree toexchange two streams of cash flow; in an interest rate swap, these cash flows are the interest paymentsfor some given amount of money. The underlying money, known in this context as the notional amount,doesn't necessarily change hands. The two parties just exchange the interest payments they wouldmake if they had actually borrowed the notional amount.There are three main types of

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