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swap interset rate and currency swap

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA AFM Exams › swap interset rate and currency swap

  • This topic has 0 replies, 1 voice, and was last updated 11 years ago by sukhdeo.
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  • May 15, 2014 at 3:19 pm #168915
    sukhdeo
    Member
    • Topics: 24
    • Replies: 22
    • ☆

    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 .

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