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What are interest rate swaps based on generally?
What is an agreement to exchange cash flows at specified future times according to certain specified rules?
These swaps are single currency, and can be either a coupon swap (fixed for floating or vanilla), or a basis swap (floating for floating):
Interest rate swaps
These swaps are fixed for fixed, floating for floating, or fixed for floating in different currencies:
LIBOR rate floats and is reset at the (beginning or ending) of each period:
Does a higher rated company or a lower rated company have a comparative advantage in the fixed rate market?
Higher Rated Company
These are securities with a coupon or interest rate that is adjusted periodically due to changes in a base or benchmark
What is the most attractive feature of the FRN?
FRN normally reprices to par every time the coupon is reset
If you are buying the swap, this means you are paying (fixed or floating) and receiving (fixed or floating)?
Paying fixed, Receiving floating
What would you like to do?
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