Swap question

CFA Level II Portfolio Management
#1

I think Im getting confused by all the derivatives info here. One of schweser questions reads "The current US dollar () to Canadian dollar (C) is .7. In a 1mill fixed for floating currency swap..." What is that mean? Does that mean I'm giving 1mill in exchange for receiving CAD? and receiving interest payments while paying CAD floating payments? What is fixed and what is floating? THe USD or the CAD?

#2

It’s ambiguous.

Any of those are possible given that curt description.

#3

Thanks. I thought so too.

#4

Take whatever comfort you can in the fact that on the real exam it won’t be ambiguous.

#5

Thank GOD because it’s hard enough as it is