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Up4
ZE Bank enters into a plain vanilla swap contract with Lux Financiers with the intent of receiving floating rate payments. Which of the following is the appropriate position of ZE Bank?
- A. Pay-fixed side
- B. Pay-floating side
- C. Long position
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Up4
The correct answer is A.
In a plain vanilla swap or interest rate swap, the party who wants to receive floating rate payments against fixed rate payments on notional principle is called the pay-fixed side.
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