This is part 6 of a 10 part series on currency swaps and interest rate swaps and their role in the global economy. In parts 1 through 4, we discussed the differences between interest rate swaps and currency swaps, as well as the pricing mechanisms for fixed-for-floating, floating-for-floating, and fixed-for-fixed swaps. In part 6, we’ll provide a real world example of how swaps are constructed and executed.
This is part 5 of a 10 part series on currency swaps and interest rate swaps and their role in the global economy. In parts 1 through 4, we discussed the differences between interest rate swaps and currency swaps, as well as the pricing mechanisms for fixed-for-floating, floating-for-floating, and fixed-for-fixed swaps. In part 5, we’ll review the basics before looking at some real world examples in parts 6 and 7.
This is part 4 of a 10 part series on currency swaps and interest rate swaps and their role in the global economy. In parts 1 and 2, we discussed the beginnings of swaps as well as the differences between interest rate swaps and currency swaps. In part 3, we discussed fixed-for-floating swaps. In part 4, we’ll discuss floating-for-floating and fixed-for-fixed swaps.
This is part 3 of a 10 part series on currency swaps and interest rate swaps and their role in the global economy. In parts 1 and 2, we discussed the beginnings of swaps as well as the differences between interest rate swaps and currency swaps. In part 3, we’ll discuss fixed-for-floating swaps.
This is part 2 of a 10 part series on currency swaps and interest rate swaps and their role in the global economy. In part 1, we discussed the beginnings of swaps. In part 2, we’ll explore the differences between the two major types of swaps and their different uses for financial institutions.
This is part 1 of a 10 part series on currency swaps and interest rate swaps and their role in the global economy. In part 1, we discuss the history of interest rate swaps so as to better understand the vital importance of this investment vehicle.
One of our team was recently asked to give a simple overview of interest rate swaps and how they work. Below was the explanation we put together, using a comparison between an interest rate swap to a fixed-rate bank loan to illustrate the key characteristics.
We think it is a nice, concise and clear way to explain interest rate swaps so thought we would share it. Comments welcome.
Introducing floating legs For our example interest rate swap we will be using the following inputs: Notional: $1,000,000 USD Coupon Frequency: Semi-Annual Fixed Coupon Amount: 1.24% Floating Coupon Index: 6 month USD LIBOR Business Day…
In the wake of the Global Financial Crisis (GFC), Corporate Governance has become a key focus, not just for large organisations but for small to medium sized entities as well. Corporate Governance relates to the…
Now that we know the basic terminology and structure of a vanilla interest rate swap we can now look at constructing our fixed leg of our swap by first building our date schedule, then calculating the fixed coupon amounts.
This is the first in our interest rate swap tutorial; a series of articles that will go from the basics about interest rate swaps, to how to value them and how to build a zero…
Once a company with foreign exchange risks has decided to lift or reduce hedging percentages as part of their risk management strategy, value-enhancing market dealing tactics to get the hedging entered at more favourable exchange…