In a typical interest rate swap the two parties will exchange a series of fixed payments for a series of payments that are linked to the level of interest rates.

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This is correct. In an interest rate swap, one party agrees to pay a fixed interest rate while the other party agrees to pay a variable, or floating, interest rate. The variable interest rate is typically based on a benchmark rate such as LIBOR or EURIBOR, and the payments are exchanged periodically over the life of the swap.

In a Typical Interest Rate Swap the Two Parties Will