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Hello SIr,
Please explain why are we not adding the basis point prior to calculating interest receivable?? why not add 0.6 to the forward rates first??
Although the bond interest itself is based on the spot yield curve plus 60 bp’s, the swap that is being offered is to exchange a fixed rate for a variable amount based on the yield curve rate (not on the yield curve rate plus 60 bp’s).
What do I look for in such questions to grasp that we do not need to add bps in our working?
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