Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA AFM Exams › swap interset rate and currency swap
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- AuthorPosts
- May 15, 2014 at 3:19 pm #168915
I am just enquiring whether their is any standard template to used as a guide to do a question on swap. eg question Sembilan co (June 2012) calculate the swap as :
Sembilan co yr 1
received floating rate 2.5%Pay fixed rate 3.7625 %
Result (payment) (1.2625 %)
In a next question Katmai co(Dec 2009) :
payment(floating rate) Libor/2 plus 0.6%
Receipt Libor/2
Payment (Fixed rate) 2.7%
Net Payment 3.3%
My question is why in Katmai co there is floating rate payment and a fixed rate payment , my understanding in swap is if one company got fixed rate it will swap for floating rate . so the swap would be receipt of floating rate and a payment of fixed rate. Kindly advise if my interpretation of swap is correct . - AuthorPosts
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