Swap question level 2 CAIA
Question from their test online at caia.org.
“An interest rate swap has a fixed rate of 3% and a variable rate currently at 5%. Which of the following best describes the swap receiver’s cash flow before netting?”
Their correct answer - The swap receiver will receive the swap rate of 3%
My question is why is this not correct - The swap receiver will pay the swap rate of 5%
If he is receiving fixed he should be paying the floating rate of 5% correct? Any help is appreciated.