CFA CFA Level 1 CFA Level 1 Question of the Week – Derivatives

CFA Level 1 Question of the Week – Derivatives

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    • Matt_AnalystPrep
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      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
    • Matt_AnalystPrep
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      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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