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Both Interest rate swap and Credit default swap carries a different kinds of inherent risks. In IRS two parties involved together to swap the fixed rate v/s floating rate of swaps or vice versa whereas in CDS it is more like Default insurance where the purchase of CDS pays a regular premium to the seller of the instrument in return for a guarantee of payment in event of fixed assets turns sour.

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Q: What is the difference between IRS and cds?
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