How would you try to profit using swaps

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Reference no: EM131989334

You are a speculator and you believe that interest rates will rise. How would you try to profit using swaps?

Assume you will trade swaps with a notional of $10 million. For simplicity, assume the yield curve is flat at 3%, and you are expecting a parallel shift.

Make some reasonable assumptions and determine how much money you will make if the curve shifts up by 50 bps.

Reference no: EM131989334

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