Swap Rate Curve

CFA Level II Fixed Income
#1

What would it mean if the swap rate curve was very steep? I’m having trouble understanding what we should know about the swap rate curve. I understand what the swap rate is- the rate in a fixed leg swap. But isn’t that a rate that tells us about investors expectations about future rates? I guess I’m trying to wrap my head around what we use the swap rate CURVE for as analysts…

Thanks,

#2

How is the swap fixed rate derived? Answer this question…

then if the swap rate curve is steep - it means the LIBOR rates (or floating rate) is increasing … which means like the interest rate environment is also rising…

#3

thnx!