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For a financial institution, a good way to think about an interest rate swap is to: Match receive - type with type of liabilities and
For a financial institution, a good way to think about an interest rate swap is to:
Match receivetype with type of liabilities and match paytype with type of assets
Both receive and pay have to be of the same type to perfectly hedge the risk of an interest rate swap
Match receivetype with type of assets and match paytype with type of liabilities
Doesnt really matter, either would work perfectly
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