Valuation of Plain Vanilla Interest Rate Swap

The speakers provides detail on valuing a plain vanilla interest rate swap.  He suggests that the value of the swap is zero or close to it when it is initiated.  For a floating rate payor, fixed coupon payments are received while a floating rate is paid.  Therefore, to value the swap, one can look at each separate stream of cash flows as a bond and the difference between the net present value of each bond is the value of the swap.  The value of the floating rate can be estimated with forward rates; for example, floating rates based on LIBOR can be forecasted using libor forward rates.
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