Zero-coupon method, Accounting Basics

A swap valuation method which involves summing and computing the present value of each and every future net settlement and would be required by the contract terms either future spot interest rates match with the forward rates implied by current yield curve.  discount rates used are the spot interest rates implied by the current yield curve for hypothetical zero coupon bonds due on the date of each future net settlement on the swap. known as Zero-Coupon Method.

 

Posted Date: 8/9/2012 5:11:27 AM | Location : United States







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