Interest rate swap

Interest rate swap

An interest rate swap is a popular and highly liquid financial derivative instrument in which two parties agree to exchange interest rate cash flows, based on a specified notional amount from a fixed rate to a floating rate (or vice versa) or from one floating rate to another. Interest rate swaps are commonly used for both hedging and speculating.

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Part of Speech: noun
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Industry/Domain: Financial services
Category: Stocks & securities
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interest-rate swap

Banking; Investment banking

Swap transaction whereby the two parties undertake to swap variable interest payments for fixed interest payments in respect of a certain nominal value at regular intervals over a ...

interest rate swap

Financial services; General Finance

A binding agreement between counterparties to exchange periodic interest payments on some predetermined dollar principal, which is called the notional principal amount. For ...

amortizing interest rate swap

Financial services; General Finance

Swap in which the principal or notional amount rises (falls) as interest rates rise (decline).

interest rate swap

Banking; Personal banking

A financial instrument representing a transaction in which two parties agree to swap or exchange net cash flows, on agreed-upon dates, for an agreed-upon period of time, for ...

Interest Rate Swap

Financial services; Financial instruments

An agreement between two parties where one stream of future interest payments is exchanged for another based on a specified principal amount. Interest rate swaps often exchange a ...

above par

Financial services; Stocks &securities

If bonds are re-sold on the secondary market, and if interest rates are lower that the bond's coupon rate, the bond will be sold at a premium, or above par.

P/E ratio

Financial services; Stocks &securities

The ratio of a company's current price per share and average earnings per share. The former is divided by the latter. A high ratio suggests high growth potential in the future.

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