Plain vanilla swap

CFA Level I Derivatives
#1

can you please explain-

How " _ In a plain vanilla swap- If interest rates decrease, the swap has a negative value to the fixed rate payer _ ".

#2

If you’re paying a fixed rate of 6.2% and LIBOR’s at 6.3%, you’re expecting a positive cash flow on the next payment. If LIBOR drops to 6.1%, you’re expecting a negative cash flow on the next payment. The present value of negative payments is negative.

#3

ok.thank you.

#4

D’accord.