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Consider a swap agreement between companies X and Y based on a notional principal of $500 million. X agrees to pay Y an interest rate
Consider a swap agreement between companies X and Y based on a notional principal of $500 million. X agrees to pay Y an interest rate of 4% per annum on the stated notional principal and Y agrees to pay X the LIBOR rate on the same notional principal. Which of the following statements is correct?
Y is the floating rate payer
X is the floating rate payer
The dollar amount exchanged between the two parties is based on the notional principal as well as the relevant interest rates
X is the fixed rate payer
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