Hello everyone,
I hve a way to value swap but i can’t understand why it is not true…
If we do this equation, it should give us the value of the swap :
(swap market - swap initial) * notional amount * sum of discount factors… -> this is basically present value of the difference of value that we must pay -> the market swap is basically the complex mean of the current forward rate… so instead of taking all the forwards, i just take the corresponding swap
Why the result is not the same than the fixed/floating rate bond method ?
thanks
but i won’t forget it