Journal Article

Index amortizing rate swaps


Abstract: As short-term interest rates have declined over the past several years, investors have increasingly sought higher yielding investment vehicles. The index amortizing rate (IAR) swap is one of several new instruments that have been developed in response to this investor demand for yield enhancement. This article explains the structure and pricing of IAR swaps, some of the risks associated with the product, and the uses and growth prospects of the market.

Keywords: Interest rates; Swaps (Finance); Options (Finance);

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Bibliographic Information

Provider: Federal Reserve Bank of New York

Part of Series: Quarterly Review

Publication Date: 1993

Volume: 18

Issue: Win

Pages: 63-70