Plain-Vanilla

Also found in: Wikipedia

0.01 sec.

Interest Rate Swap

The exchange of interest rates for the mutual benefit of the exchangers. The exchangers take advantage of interest rates that are only available, for whatever reason, to the other exchanger by swapping them. The two legs of the swap are a fixed interest rate, say 3.5%, and a floating interest rate, say LIBOR + 0.5%. In such a swap, the only things traded are the two interest rates, which are calculated over a notional value. Each party pays the other at set intervals over the life of the swap. For example, one party may agree to pay the other a 3.5% interest rate calculated over a notional value of $1 million, while the second party may agree to pay LIBOR + 0.5% over the same notional value. It is important to note that the notional amount is arbitrary and is not actually traded. This is also called a plain vanilla swap.

plain-vanilla

Of or relating to the uncomplicated version of a particular type of security. For example, a plain-vanilla derivative is typically exchange-traded and void of bells and whistles. Likewise, a plain-vanilla bond is not convertible and cannot be called.

Want to thank TFD for its existence? Tell a friend about us, add a link to this page, add the site to iGoogle, or visit the webmaster's page for free fun content.

?Page tools

Printer friendly
Cite / link

Feedback
Add definition

Mentioned in	?		References in periodicals archive	?		Financial browser	?		Full browser	?
Absolute Rate Absolute-Rate Swap Amortizing Interest Rate Swap Call Swaption Differential Swap down-and-in option down-and-out option Enhanced Index Fund Fixed for Floating Swap Fixed-Rate Payer Floating-Rate Payer Interest Rate Future Interest Rate Futures Contract Interest Rate Swap Knock-In Option Overnight Index Swap Plain Vanilla Plain Vanilla Swap Receive Fixed Counterparty			There are a lot of securitizations that have proved their viability -- mostly plain-vanilla securitizations of various types, in consumer products, consumer lending, student loans, a variety of other things. US recession "likely over:" Fed chief by Al Arabiya (Saudi Arabia) On the other hand, there are a lot of securitizations that have proved their viability -- mostly plain-vanilla securitizations of various types, in consumer products, consumer lending, student loans, a variety of other things. US recession over, but economy still weak: Bernanke by AFP / AFP American Edition On the other hand, there are a lot of securitizations that have proved their viability -- mostly plain-vanilla securitizations of various types, in consumer products, consumer lending, student loans, a variety of other things. US recession over, but economy still weak: Bernanke by AFP / AFP Global Edition			Piramide de riesgo Piramide financeira Piramide finanziara Piso Pit Pit Committee pitch Pitch book PITI Pivot Pivot Point PK PKR PL Place Place financiere placed in service Placement Placement Ratio Plafond Plafond d'endettement Plafond prix Plage de taux Plain Vanilla Plain Vanilla Swap Plain-Vanilla plaintiff Plan Administrator Plan Agreement Plan Company Plan Completion Insurance Plan de acumulacion voluntaria Plan de inversion mensual Plan de pagos periodicos Plan de reduction del deficit Plan de reduction du deficit Plan de reinversion dividendos Plan de reparticion de utilidades Plan for Reorganization Plan Participant Plan Participants Plan Provider Plan Sponsor Plan Sponsors Planejamento centralizado Planejamento organizacional Planned Amortization Class Planned Capital Expenditure Program Planned financing program planned unit development planning commission			plain wool Plain Words Plain Words, a guide to the use of English Plain, the plain-bodied plain-bodied plain-bodied plain-bodied Plain-breasted Hawk Plain-carbon steel Plain-carbon steel plain-clothes plain-cut joint Plain-dealing Plain-Error Rule Plain-hearted plain-Jane plain-laid plain-laid Plain-Meaning Rule Plain-Paper Optimized Printing plain-sawing plain-sawn Plain-song Plain-song plain-speaking Plain-spoken Plain-spoken Plain-text Plain-Text Block Chaining Plain-Vanilla plain-woven Plainant plainchant plainchant plainclothes plainclothes plainclothes man plainclothesman Plaine des Jarres Plaine des Jarres plained plained plained plained plained plainer plainer plainer plainer plainer plainest plainest plainest plainest plainest Plainfield Plainfield Plainfield Area Regional Sewer Authority Plainfield Community Middle School Plainfield Middle School

Financial Dictionary

Free Tools:	For surfers: Free toolbar & extensions \| Word of the Day \| Help For webmasters: Free content \| Linking \| Lookup box \| Double-click lookup

Disclaimer
All content on this website, including dictionary, thesaurus, literature, geography, and other reference data is for informational purposes only. This information should not be considered complete, up to date, and is not intended to be used in place of a visit, consultation, or advice of a legal, medical, or any other professional.