easy · FRM Part 1
At the inception of a plain-vanilla interest rate swap, which statement is correct?
- The swap is recorded as an asset on the balance sheet of both parties.
- The floating-rate payer is guaranteed to lose money if rates fall.
- The fixed-rate payer must pay an upfront premium to the floating-rate payer.
- The present value of the fixed-rate leg equals the present value of the floating-rate leg.
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