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Interest Rate Swaps
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Interest Rate Swaps
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4:47
Khan Academy
Sal Khan
Interest rate swap 2
Continue to explore interest rates with this example, in which company A and B swap loans. A pays fixed 7% to B, B pays variable LIBOR+1% to A. They don't exchange the $1 million, just interest. A ends up with a fixed rate loan, B gets a variable rate loan.
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