Valuing an Interest Rate Swap

The speaker discusses the valuation of an interest rate swap.  At the time the counterparties agree to swap, the value of the swap is nearly 0; each counterparty expects the benefit to change over time as rates change.  Each leg of the swap can be treated as a bond, one fixed and one floating.  Therefore, the value of the interest rate swap is simply the difference in value between the two bonds
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