maryli

Dreary Wrote:
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> ---------
> Let's say its a currency swap. All you do is value
> each bond in their respective currencies. If one
> or both are fixed rate, you value them like normal
> bonds. If one or both are floating, you use the
> floating method above. Then you take the value of
> one of the bonds, multiply it by the exchange
> rate, and subtract.
> ------------
>
> Yes but be careful not to forget to set the
> notional to be equivalent to original. So, if you
> come up with 1.25 euros as the price with the
> initial exchange rate at $0.89/euro, you cannot
> just convert the 1.25 euros using current exchange
> rate. What's your equivalent notional?

I like your thinking sir.