Derivative - Lehigh Case study

[shrubaks123]

Question 2
How do we know that we will use Swap 3 only and not any other mentioned there?

 

[cpk123]

this was answered a couple of days ago.
max duration of swap - ensures your notional amount on the swap is lower.

 

[shrubaks123]

And can you please also say why do we prefer small notional?

 

[cpk123]

aren’t you going to be spending that every so often? Would you like to pay a larger amount ???

 

[shrubaks123]

I got it ..thanks …it’s a simple concept ..