In interest rate swap transaction, party who pays fixed payments of interest is classified as

A. notion buyer

B. notion seller

C. swap buyer

D. swap seller

Answer: Option C

Solution(By Examveda Team)

In interest rate swap transaction, party who pays fixed payments of interest is classified as swap buyer. A swap is a derivative contract through which two parties exchange the cash flows or liabilities from two different financial instruments. Most swaps involve cash flows based on a notional principal amount such as a loan or bond, although the instrument can be almost anything.