if the cost advantage of interest rate swaps would likely be arbitraged away in competitivemarkets, what other explanations exist to explain the rapid development of the interest rateswap market



Answer :

All types of debt instruments are not always available to all borrowers. a borrower may use a swap to get out of one type of financing and to obtain a more desirable type of credit that is more suitable for its asset maturity structure.

Finance is the observation and field of cash, currency, and capital assets. It is related to, however now not synonymous with economics, the have a look at production, distribution, and intake of cash, belongings, goods, and services (the subject of economic economics bridges the two). Finance activities take place in economic systems at various scopes, for that reason, the field can be roughly divided into non-public, corporate, and public finance. In a monetary system, belongings are sold, offered, or traded as monetary units, which include currencies, loans, bonds, stocks, shares, alternatives, futures, and so on. The property also can be banked, invested, and insured to maximize price and minimize loss. In exercise, dangers are always present in any economic action and entity.

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