In a vanilla interest rate swap:

Question

BlackTom AI · Accepted Answer

The question asks about the structure of a vanilla interest rate swap, so we should compare the given statements to the standard definition.
Option 1: 'one party pays another party an amount calculated according to a floating interest rate on a notional principal, in exchange for an amount calculated on the basis of a fixed interest rate.' This precisely describes a typical vanilla interest rate swap: there is no exchange of notional principal, only the net interest payments—one leg floating, the other fixed. This option aligns with the conventional understanding of a plain-vanilla swap.
Option 2: 'the amounts payable between parties depends on a specified principal that is exchanged at the beginning and at the end.' In a vanilla interest rate swap, there is no actual exchange of notional principal during the life of the swap (no principal exchange at inception or maturity). The notional serves only as a reference to calculate interest payments, not as an amount exchanged, so this statement is incorrect.
Option 3: 'only interest flows are exchanged until maturity, when the principal is exchanged according to the difference in the interest rates over the lifetime of the swap.' This mixes up the typical mechanics: in a vanilla swap, there is no principal exchange at maturity or at any time. The cash flows are net interest payments on the notional, with no final principal exchange. The reference to exchanging principal at maturity makes this option false.
Option 4: 'the amounts payable between parties depend on a specified principal that is exchanged at the outset.' Again, the key issue is the existence of principal exchange. In a standard vanilla interest rate swap, there is no upfront principal exchange; the payments are based on the notional but the notional itself is not exchanged. Therefore this statement is not accurate for a vanilla swap.

In a vanilla interest rate swap:单项选择题

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