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Let's say you have entered into a swap agreement with a face value of $100 million under which every 6 months you agree to pay
Let's say you have entered into a swap agreement with a face value of $100 million under which every 6 months you agree to pay LIBOR and receive a fixed 4%. On the date you signed the contract, the LIBOR rate is 3%. Six months later, LIBOR is 3.5%. Your actual net payment of what you receive on the first payment date is equal to (negative sign means you receive)
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In a plain vanilla interest rate swap agreement one party agrees to pay a fixed interest rate a...
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