Assigned Reading #61: Swap Markets and Contracts: Schweser S something, guidance, provided

dmar

Is there an error in the answer to this question? It seems to me the answer shown for value of $ floating side is incorrect. Shouldn’t it be:
$10,500 x .9923 + $1,010,500 x .9791 = $999,799.70
instead of what they have provided as an answer:
$1,010,500 x .9923 = $1,002,719
Am I missing something? I appreciate any guidance.

defour44

if they are saying value to the floating is what the fixed side pays - then they are correct…
what you have calculated is what the floating pays - hence what the value would be TO the fixed side.

prav_Cfa7

Dear CP,
Thank you for your note - but unfortunately, I don’t quite understand the distinction you are making. Can you please elaborate?
Many thanks.