A swap dealer quotes that the rate on a plain vanilla swap, for it to pay fixed, is the five year Treasury rate plus 10 To receive fixed, the dealer quotes the rate as the five year Treasury rate plus 15 Assuming the five year Treasury rate is 7 60 percent, explain what these quotes mean ...

The dealer is indicating that it will ente ...

A swap dealer quotes that the rate on a plain vanilla swap, for it to pay fixed,

Question:

A swap quotes that the rate on a plain vanilla swap, for it to pay fixed, is the five-year Treasury rate plus 10. To receive fixed, the quotes the rate as the five-year Treasury rate plus 15. Assuming the five-year Treasury rate is 7.60 percent, explain what these quotes mean?
Dealer
A dealer in the securities market is an individual or firm who stands ready and willing to buy a security for its own account (at its bid price) or sell from its own account (at its ask price). A dealer seeks to profit from the spread between the...