DEFINITION of 'Zero Basis Risk Swap  ZEBRA'
A swap agreement between a municipality and a financial intermediary.
Also known as a "perfect swap" or "actual rate swap".
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BREAKING DOWN 'Zero Basis Risk Swap  ZEBRA'
The municipality pays a fixed rate of interest to the financial intermediary and receives a floating rate of interest in return. The floating rate received is equal to the floating rate on the outstanding floating rate debt initially issued by the municipality to the public.
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RELATED FAQS

What are interest rate swaps on the OTC market?
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What would motivate an entity to enter into a swap agreement?
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Can individual investors profit from interest rate swaps?
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How are swap agreements financed?
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When was the first swap agreement and why were swaps created?
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