Derivatives

Callable Ratchet Inverse Floater Note

October 27, 2021
Derivatives

Callable Geared Ratchet Inverse Floater

October 27, 2021

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An ordinary fixed-floating interest rate swap. In this swap, one party pays the fixed rate and the other pays the floating rate in specified intervals (coupon periods) over the life of the swap. The buyer of the swap pays fixed and receives floating, while the seller pays floating and receives fixed.

A coupon swap involves no cash changing hands at inception and hence it is a par swap.

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