BTHE PLAIN VANILLA INTEREST RATE SWAP INVOLVES TRADING FIXED INTE...

105) B

The plain vanilla interest rate swap involves trading fixed interest rate payments for floating rate payments.

Swaps are a zero sum game, what one party gains the other party loses. In interest rate swaps, only the net

interest rate payments actually take place because the notional principal swapped is the same for both

counterparties and in the same currency units, there is no need to actually exchange the cash.