Spread Swap relative

LBriscoe

How does the spread swap compares the relative attractiveness of fixed and floating rate bonds?
Tks

thommo77

It's directly from the curriculum... thanks to hellscream, sniper and everyone.



Edited 1 time(s). Last edit at Saturday, May 28, 2011 at 09:01AM by deriv108.

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deriv108 Wrote:
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> I have the same question. "The swaps framework
> allows managers (as well as issuers) to more
> easily compare securities across fixed-rate and
> floating-rate markets." How?


This one came from Schweser Practice exam right? Should we just ignore Schweser altogether?

infinitybenzo

swap market is way more fluid,liquid,active than the bond markets which allows for relative comarison easier

Valores

Swap spread of a corporate bond is its spread over the prevalent fixed rate on interest rate swaps of similar maturity. It is believed to be a good indicator of credit risk or even liquidity premium because it is market driven and easy to obtain and compare. It is more popular in the European markets but gaining popularity in the US as well.

jmh530

I have the same question. "The swaps framework allows managers (as well as issuers) to more easily compare securities across fixed-rate and floating-rate markets." How?

IAmNeil

never heard it

Darien

I mean swap spread