What is basis point adjustment? Why is it not appropriate simply to add the basis point differential

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What is basis point adjustment? Why is it not appropriate simply to add the basis point differential associated with the first currency to the quoted swap rate that the firm will pay?

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International Financial Management

ISBN: 978-0132162760

2nd edition

Authors: Geert Bekaert, Robert J. Hodrick

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Question Posted: May 28, 2012 02:45 AM

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What is basis point adjustment? Why is it not appropriate simply to add the basis point differential

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If a customer wants the financial intermediary to do a currency swap in which the financial intermed...View the full answer

International Financial Management

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