Q570
In interest rate swap transaction, party who pays fixed payments of interest is classified as
A.
notion buyer
B.
notion seller
C.
swap buyer
AnswerD.
swap seller
Answer: Option C
Solution
Answer: Option C
Solution:
In interest rate swap transaction, party who pays fixed payments of interest is classified as swap buyer. A swap is a derivative contract through which two parties exchange the cash flows or liabilities from two different financial instruments. Most swaps involve cash flows based on a notional principal amount such as a loan or bond, although the instrument can be almost anything.