Question: 2. Define the swap rate and then plot the five-year swap rate (FRED code: MSWP5). Describe a transaction involving the swap rate and the actions

2. Define the swap rate and then plot the five-year swap rate (FRED code: MSWP5). Describe a transaction involving the swap rate and the actions of the participating parties, as we have learned in Chapter 9. Just give an example of two banks swapping fixed for variable rates, as described in the textbook.

[Hint: The data go only up to Sep 2016 as the series was then discontinued.]

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