Question #50
Reading: Reading 30 Pricing and Valuation of Forward Commitments
PDF File: Reading 30 Pricing and Valuation of Forward Commitments.pdf
Page: 20
Status: Unattempted
Question
Over the life of a swap, the price of the swap:
Answer Choices:
A. is approximately equal to the market value of the swap
B. fluctuates with changes in the yield curve
C. does not change
Explanation
Typesetting math: 100%
The price of a swap, quoted as the fixed rate in the swap, is determined at contract
initiation and remains fixed for the life of the swap.