Show How Your Proposed Swap Would Work for Firm

question 28

Essay

Show how your proposed swap would work for firm
A. (e.g. if you were acting as an agent for the swap bank, try to "sell" firm A on your swap)
I would point out that his contracting costs would be less with just having 1 swap instead of 2 forward contracts. Also, he might be able to get a better rate through the swap if he can't find forward contracts at his desired maturity and amounts.

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Definitions:

Flexible

Characterizes entities or individuals that are adaptable to changes, capable of being bent or adjusted without breaking.

Less Bureaucratic

Describes organizations or systems that operate with fewer formalities and rigidities, allowing for more flexibility and efficiency.

Autonomy

The degree of independence and self-direction that an individual or entity has to make decisions, often within a particular role or workplace.

Responsibility

The state or fact of being accountable or to blame for something, involving the acceptance of duty to complete tasks and make decisions.