luda002

but with LIBOR there is NO ANNUALIZING. Look it up.

it is an ADD-ON Rate, not a compounded rate.

Schweser does throw in a few problems on SWAPs with Spot Rates - but that is just Schweser.

There is no annualizing.

1+0.05*90/360 = 1.0125

(1.05)^0.25 = 1.01227

not too much of a difference... but on bigger amounts and multiplied / divided could make a lot of difference to the answer.

CP