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Basic Question 3 of 12

The swap rate curve:

I. plots maturity (or length) of the swap against the fixed rate you will have to pay/receive if you enter into the swap.
II. is a default-free curve.
III. always trades through (above) the corresponding bond curve.
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User Contributed Comments 1

User Comment
Querdenker Well, most banks are down at Single A these days...
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I just wanted to share the good news that I passed CFA Level I!!! Thank you for your help - I think the online question bank helped cut the clutter and made a positive difference.
Edward Liu

Edward Liu

Learning Outcome Statements

explain the swap rate curve and why and how market participants use it in valuation;

calculate and interpret the swap spread for a given maturity;

describe short-term interest rate spreads used to gauge economy-wide credit risk and liquidity risk;

CFA® 2025 Level II Curriculum, Volume 4, Module 26.