The value of a pay-fixed, receive-floating interest rate swap is found as the value of a
a. floating-rate bond minus the value of a fixed-rate bond.
b. fixed-rate bond minus the value of a floating-rate bond.
c. floating-rate bond minus the value of another floating-rate bond.
d. fixed-rate bond minus the value of another fixed-rate bond.
e. none of the above correctly identify how this value is found.
Answer: A
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