Suppose the quote for a five-year swap with semiannual payments is 8.50-8.60 percent.This means
A)the swap bank will pay semiannual fixed-rate dollar payments of 8.50 percent against receiving six-month dollar LIBOR.
B)the swap bank will receive semiannual fixed-rate dollar payments of 8.60 percent against paying six-month dollar LIBOR.
C)the swap bank will pay semiannual fixed-rate dollar payments of 8.50 percent against receiving six-month dollar LIBOR,and the swap bank will receive semiannual fixed-rate dollar payments of 8.60 percent against paying six-month dollar LIBOR.
D)none of the options

Question

Quizplus · Accepted Answer

This quote means the swap bank is willing to pay a fixed rate of 8.50% in exchange for receiving the six-month dollar LIBOR, and it is also willing to receive a fixed rate of 8.60% in exchange for paying the six-month dollar LIBOR.

Suppose the Quote for a Five-Year Swap with Semiannual Payments