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Substitution Swap

外汇网2021-06-19 23:57:06 57

A swap that is carried out by trading a fixed-income security for a higher yielding bond with similar features.

|||The two securities being swapped have similar coupon rates, maturity dates, call features, credit quality, etc.

Investors will most often participate in substitution swaps when they believe there is a temporary discrepancy in bond prices due to market disequilibrium.

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