This QuickLearn Bullet introduces basic interest rate swaps and their construction and pricing. The discussion begins with a simple 3-year IRS used by a company to hedge its interest rate exposure under floating rate debt.
We remind you that familiarity with forward rate agreements, or FRAs, is fundamental to tackling the materials in this Bullet, so you should first review our Bullet on FRAs if you have not done so already.
target audience:DX1 Traders, risk managers, sales force, financial control and audit
prerequisite required:
– Forward Rate Agreements
prerequisite recommended:
– None
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