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In a fixed-to-floating interest rate swap, one party agrees to pay to another party cash flows equal to a fixed interest on a notional principal,

In a fixed-to-floating interest rate swap, one party agrees to pay to another party cash flows equal to a fixed interest on a notional principal, and the other party agrees to pay a variable rate on the notional principal equal to a fixed margin relative to LIBOR for a predetermined number of years. In a currency swap, the principal is specified in each of two currencies and the principal amounts are exchanged at the beginning and at the end of the swap.

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