Explain the major benefits of a total return swap?

What will be an ideal response?


• Owners of total return swaps get the financial benefits of owning the underlier
(e.g., equity indices, bundles of loans, or portfolios of bonds) without putting up the
full price of the underlier (i.e., they can operate on margin).
• Total return swaps are very flexible, allowing users to change their positions quickly.
• Total return swaps can be used to hedge existing positions where default is suspected.

Business

You might also like to view...

Answer the following statements true (T) or false (F)

1. A status quo situation in a sustainability matrix is represented in Cell 4. 2. The best situation in a sustainability matrix is illustrated in Cell 4 where there is substantial funding available for the social impact being made. 3. In a compliance-based strategy, there is little to no consideration given to issues of sustainability. 4. Social licence is a term that is increasingly appearing in media stories. 5. Social licence involves society's trust that the activities of business are legitimate and consistent with social expectations and the values of stakeholders.

Business

Which one of the following is not an external user of financial statements?

a. Suppliers b. Creditors c. Investors d. The company's controller

Business

As a business practice, broadening involves ________

A) acquiring or merging with firms in the same or complementary industries to gain economies of scale and scope B) factoring the interests of customers, employees, shareholders, and other stakeholders into the activities of the enterprise C) buying more goods and services from outside domestic or foreign vendors D) appointing teams to manage customer-value-building processes and break down walls between departments E) becoming more accountable by measuring, analyzing, and documenting the effects of marketing actions

Business

Asking consumers to reveal the blogs, Websites, and social media networks they follow

A) provides vital information about the traditional media audiences are following. B) allows the government to build psychographic profiles of online users. C) ensures that marketers uncover non-media connectors. D) constitutes a violation of FTC and FCC codes. E) permits certain sites to block content to uncooperative consumers.

Business