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The most common IRS is a fixed for floating swap, whereby one party will make payments to the other based on an initially agreed fixed rate of interest, to receive back payments based on a floating interest rate index. Each of these series of payments is termed a "leg", so a typical IRS has both a fixed and a floating leg.
An overnight indexed swap (OIS) is an interest rate swap (IRS) over some given term, e.g. 10Y, where the periodic fixed payments are tied to a given fixed rate while the periodic floating payments are tied to a floating rate calculated from a daily compounded overnight rate over the floating coupon period.
Another important relationship is that if the fixed swap rate is equal to the strike of the caps and floors, then we have the following put–call parity: Cap-Floor = Swap. Caps and floors have the same implied vol too for a given strike. Imagine a cap with 20% vol and floor with 30% vol. Long cap, short floor gives a swap with no vol.
A constant maturity swap (CMS) is a swap that allows the purchaser to fix the duration of received flows on a swap. An amortizing swap is usually an interest rate swap in which the notional principal for the interest payments declines during the life of the swap, perhaps at a rate tied to the prepayment of a mortgage or to an interest rate ...
An exchange fund, also known as a swap fund, is an investment vehicle that allows investors with large stock positions to pool their stocks into a single fund, diversifying their holdings without triggering a taxable event.
After years of uncertainty, the Internal Revenue Service finalized rules on Thursday to make clear that people who inherit retirement accounts have 10 years to spend down the funds and, in many ...
AED and SAR currency exchange rates are each pegged to the USD, hence their interest rate swap markets are highly correlated to the US interest rate swap market respectively. e.g. if the SAR IRS Spread for a 5-year maturity is quoted as +150 basis points and the USD 5 year IRS fixed rate is trading at 1.00%, where the IRS fixed payments are ...
For 2025, the IRS has adjusted income tax brackets to accommodate rising wages. The 37% top tax rate applies to singles earning over $626,350 and married couples earning over $751,600 (an increase ...