Question: Give two interpretations of an interest rate swap
Give two interpretations of an interest-rate swap.
Answer to relevant Questions(a) What is meant by JPY LIBORBBA? (b) Describe the coupon interest characteristics of this bond. (c) What are the risks associated with investing in this bond if the investor’s home currency is not in Japanese yen. In determining the cash flow for the floating-rate side of a LIBOR swap, explain how the cash flow is determined. The following appeared on a quote sheet: “Receiver Swaption: An option to receive the fixed leg of a swap (i.e., long receiver is long duration). Payer Swaption: An option to pay the fixed leg of a swap (i.e., long payer ...How does one approximate the CDS spread for a single-name CDS on a corporate entity? Answer the below questions. (a) What is meant by a reference entity? (b) What is meant by a reference obligation?
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