Interest rate swap.. Easy Definition.. #ChartAcc

Friday, January 17, 2014 - An interest rate swap is:
  • An agreement in between 2 parties 
  • to make interest payments to each other 
  • for a set period 
  • based upon a notional principal (Used for calculation only, no risk is attached to it.)

Net of payments are exchanged on a fixed interest rate for payments based on a floating rate, often LIBOR.

The fixed rate is known as the swap rate. 

Party A pays a fixed rate to to party B and receives a variable rate in exchange from party B. 

  • to hedge against interest rate exposure, 
  • to speculate on future interest rate movements
  • to obtain a higher yield on assets.

ChartAcc Sharespace for Chartered Accountats by Vikrmn CA Vikam Verma 

Stay connected to ChartAcc, a professional ShareSpace.
Posted by Vikrmn: Author of "10 Alone" (CA Vikram Verma)


ChartAcc Logo by Vikrmn CA Vikram Verma
Share space for Chartered Accountants
and Financial Professionals

Novel by a Chartered Accountant

10 Alone

A novel by Vikrmn (CA Vikram Verma)

a saga of 10 friends.. 10 Dreams.. 10 hearts.. 10 Minds..

It's a story of 10 Chartered Accountants.. who celebrate personal and professional life.. all together.. Ten Together.. |