In US, The Federal Open Market Committee (FOMC), a component of the Federal Reserve System, is responsible for making key decisions about interest rates and the growth of the money supply
Derivative is a product whose value is derived from the value of one or more basic variables, called bases (underlying asset, index, or reference rate). The underlying asset can be equity, foreign exchange, commodity or any other asset.
A forward contract is a customized OTC contract between two parties, where settlement takes place on a specific date in the future at todays pre-agreed price
Swaps are agreements between two parties to exchange cash flows in the future according to a prearranged formula. They can be regarded as portfolios of forward contracts. The two commonly used swaps are:
Interest rate swaps entail swapping only the interest related cash flows between the parties in the same currency.
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