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What I understood from swaps is, the Currency Swaps & Interest Rate Swaps are more or less the same when it comes to answering them.
We have to choose the cheaper swap combination and then divide the gain and bank fees in a pre agreed ratio.
It’s just that we have to swap back the principal amount at the pre fixed rate. And the rest of the method of answering of both the SWAPS is pretty much the same.
Am I right or am I missing something here?You are correct.
The rate at which the principal is swapped back depends on what is agreed between the parties and in the exam you have to be told this.
Have you watched my free lectures on swaps?
I have watched the Interest Rate Swaps, but wasn’t able to find the Currency Swaps lecture. Please confirm if you have covered that topic too so that I could look out for that again.
Thanks a lot!
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