An option in which the buyer of the option has the right to enter into to an interest rate swap on certain dates throughout the option's life. The terms of the swaption specify whether the buyer will be the payer of the floating rate or the payer of the fixed rate. It is called a Bermudan swaption because, like a Bermudan option, the swaption may only be exercised on certain, specified dates over its life. See also: Call Swaption, Put Swaption, Plan Vanilla Swap.
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