The bank pays floating (which has a higher PV) and receives fixed (which has a lower PV). Why is the value of the value of the swap positive for the bank?
Hi, thanks for the explanation. Just clarification, shouldn't the value be positive for the receiver of floating rate bond, pay fixed ; negative for receiver of fix, pay floating? 06:56
Thank you for your video, but what is the value of the swap if one year has passed?
The bank pays floating (which has a higher PV) and receives fixed (which has a lower PV). Why is the value of the value of the swap positive for the bank?
Hi, thanks for the explanation. Just clarification, shouldn't the value be positive for the receiver of floating rate bond, pay fixed ; negative for receiver of fix, pay floating? 06:56
why did you use exp as a function
assmued continuous compounding
so many questions not well explained