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Finance Dictionary and Glossary of Investment Terms
equity swap
Definition 1.
A swap for which payments on one or both sides are linked to the performance of equities or an equity index. Sometimes used to avoid withholding taxes, obtain leverage, or enjoy the returns from ownership without actually owning equity.
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Definition 2.
A swap in which the cash flows exchanged are based on the total return on some stock market index and an interest rate (either a fixed rate or floating rate). Related: Interest rate swap.
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