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Swap Pricing vs. Swap Valuing

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Pricing: The determination of initial swap terms at the start of the swap's life
Interest Rate Swap Price = interest rate paid by fixed rate payer
Valuing: Calculating the market value of a swap at any point in its life.
A swap's value at initiation is set to zero.

Key Swap Valuation Concepts
Analysts must recognize that a swap's cash flows can be replicated by the cash flows from a portfolio of other financial instruments.
The value of a floating rate instrument is par (1.0) at its start and on all coupon days.
For example a floating rate bond's value will change in the time between issuance and the coupon payment date, but when the bond's next coupon payment is made, the rate will be reset and the bond value will return to par.

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