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Explain Why a Swap Is Effectively a Series of Forward

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Explain why a swap is effectively a series of forward contracts.


Definitions:

Test Statistic

A value derived from sample data that is utilized to determine the rejection of the null hypothesis in statistical hypothesis testing.

Producer

An individual, company, or entity that creates or supplies goods or services.

Chi-square Distribution

A probability distribution that describes the distribution of the sum of squared standard normal deviates.

Normal Population

A Normal Population is a statistical population where the data follows a normal distribution, characterized by a symmetric bell-shaped curve.

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