Fixed Price

Fixed Price
The leg of a swap that is based on an unchanging interest rate. A plain vanilla interest rate swap is an exchange of two streams of cash flows. Both streams are based on the same amount of notional principal, but one stream pays interest on that notional principal at a fixed rate (or fixed price) and one stream pays interest on the notional principal at a floating rate (or floating price).

The fixed-rate stream does not change for the duration of the swap, while the floating rate stream changes periodically over the duration of the swap as its benchmark interest rate, often LIBOR, changes in accordance with market conditions. Two parties, called counterparties, enter into such transactions to reduce their exposure to changes in interest rates or to attempt to profit from changes in interest rates.


Investment dictionary. . 2012.

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  • fixed price — ➔ price1 * * * fixed price UK US noun [C] COMMERCE ► a price that will not change after it is agreed: »We agreed to purchase the finished goods at a fixed price. »With a fixed price contract, the builder pays all extra costs beyond its agreed… …   Financial and business terms

  • Fixed price — is a phrase used in Indian English to mean that no bargaining is allowed over the price of a good or, less commonly, a service. As bargaining is very common in many parts of the world outside of Europe and North America, this term expresses an… …   Wikipedia

  • fixed-price´ — fixed price, 1. a uniform price set for all buyers of a product. 2. a price set by a manufacturer under a fair trade agreement. 3. a price set under price control or through price fixing. –fixed price´, adjective …   Useful english dictionary

  • fixed price — fixed price, adj. a price established by a seller, by agreement or by authority, as the price to be charged invariably. [1905 10] * * * …   Universalium

  • fixed-price — fixedˈ price adjective (of a menu, contract, etc) having a price that cannot be varied • • • Main Entry: ↑fix …   Useful english dictionary

  • fixed price — noun 1. : a uniform price for all customers as opposed to a price obtained by bargaining 2. : a price fixed by international agreement or by a governmental price fixing agency 3. : a price established by a contract and not subject to subsequent… …   Useful english dictionary

  • fixed-price — adj. Fixed price is used with these nouns: ↑menu …   Collocations dictionary

  • fixed price — fiksuotoji kaina statusas T sritis Gynyba apibrėžtis Kaina, kuri nustatoma sutarties sudarymo metu, bet vėliau gali būti keičiama. atitikmenys: angl. fixed price ryšiai: susijęs terminas – pastovioji kaina šaltinis NATO mokymų ir pratybų… …   Lithuanian dictionary (lietuvių žodynas)

  • fixed price — price not subject to change, established price …   English contemporary dictionary

  • Fixed Price Purchase Option — The right, but not the obligation, to buy a leased item at a predetermined price. With a fixed price purchase option, the purchase price is established when the lease terms are agreed upon. The lease agreement should also describe when the option …   Investment dictionary

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