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Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA AFM Exams › interest swap
Sir may i ask is swap is a OTC arrangement which not flexibility in lapse or exercise?
Because i read from question Pault sep/dec 2016 state that company can choose let the arrangement lapse.
Thus i not so sure on my understanding about swap.
You have misunderstood the examiners answer.
The swap is for 4 years will continue for 4 years and then stop. However the loan lasts for 10 years and so at the end of 4 years they have the choice of either finding a new swap arrangement or stop swapping and start paying at floating rate.