Hi, would appreciate if someone could explain the following 2 questions to me. The questions are from Schweser QuestionPro. 1) I am confused because it says semi-annual swap payments so there should be 3 payments and according to the explanation, payments would be received only twice. Q: Which of the following is equivalent to a receive-fixed swap with a tenor of one and a half years with semi-annual swap payments and a fixed rate of 5% (exchanged for London Interbank Offered Rate (LIBOR))? Assume that the notional principal is $10,000,000. ANS. A strip of two forward rate agreements, which obligates the party to receive a fixed rate of 5% and pay six-month LIBOR on a notional principal of $10,000,000. Explanation: This is an example of two 6-month forward rate agreements (FRAs). The first FRA is entered into at time 0 with the payment determined at 6 months and paid at 12 months. The second FRA is entered into at 6 months with the payment determined at 12 months and paid at 18 months. 2) Q:For a 1-year quarterly-pay swap, an equivalent position with short puts and long calls would involve :ANS three put-call combinations expiring on the first three settlement dates of the swap. HOw is this please? Many thanks

I posted this awhile ago. In a swap, at initiation, both the payments for the fixed and floating are known. This is because the first floating payment is based in the LIBOR curve at time0. So in this case you only need two FRAs because the first periods payments are already known.