practice exam says the buyer receives cash flows determined by a floating rate plus spread. not receiving fixed cash flows??
“Total return swap - swap in which one party pays the realized total return on a reference asset, and the other party pays a floating return such as LIBOR” (CFAI Reading, V4, p392 - this material is marked optional, so I am not sure we’re suppose to know terms of total return swap, although it is being mentioned in several parts of the curriculum).
For a TRS, the receive side (you pay the reference asset) can be fixed or floating… but don’t bother going against the CFAI on the test.
The party pays the realized total return on a reference asset is the total return swap payer, am I right?