[Content removed at user request]
Ask the Tutor ACCA AFM
Interest Swap
No. The swap can only benefit one way round. On the figures you have given it can only benefit if A wants variable and B wants fixed.
The reason is that in this example, the difference in the fixed rates (3%) is greater than the difference in the floating rates (1%).
It applies to all swaps. Think about it - there can only ever be a benefit one way round.
Topic lockedNew replies are closed.
