Which key feature differentiates a swap from a forward contract?

• A swap is a derivative contract that obligates two parties to exchange a series of future cash flows, whereas a forward contract is an agreement to exchange a single cash flow at a specific future date. Multiple cash flow exchanges: Interest rate swaps, for example, involve periodic exchanges of fixed-rate payments for floating-rate payments over the life of the contract, which could last several years. • Forward contract comparison: A forward contract is generally a single-period transaction, meaning it is settled only once at the maturity date. • Swap composition: A swap can be considered a series of forward contracts (or forward rate agreements) Therefore, the defining feature that differentiates a swap from a forward contract is the exchange of multiple cash flows (Periodic payments).