The fixed portion of an interest-rate swap, expressed as a percentage rather than as a premium or a discount to a reference rate.

The absolute rate is a combination of the reference rate and the premium or discounted fixed percentage. For example, if the LIBOR is 3% and the fixed interest portion of the swap is at a 7% premium, the absolute rate is 10%.

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… In this case, we interchange the risk and the rate of return and consider the following problem … American Journal of Agricultural Economics, 53: 53–62 … [Crossref], [Google Scholar]; Konno, H. 2003. Portfolio optimization of small scale funds using mean-absolute deviation model …

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… In this case, we interchange the risk and the rate of return and consider the following problem … American Journal of Agricultural Economics, 53: 53–62 … [Crossref], [Google Scholar]; Konno, H. 2003. Portfolio optimization of small scale funds using mean-absolute deviation model …

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… In this case, we interchange the risk and the rate of return and consider the following problem … American Journal of Agricultural Economics, 53: 53–62 … [Crossref], [Google Scholar]; Konno, H. 2003. Portfolio optimization of small scale funds using mean-absolute deviation model …

www.tandfonline.com [PDF]

… In this case, we interchange the risk and the rate of return and consider the following problem … American Journal of Agricultural Economics, 53: 53–62 … [Crossref], [Google Scholar]; Konno, H. 2003. Portfolio optimization of small scale funds using mean-absolute deviation model …

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… In this case, we interchange the risk and the rate of return and consider the following problem … American Journal of Agricultural Economics, 53: 53–62 … [Crossref], [Google Scholar]; Konno, H. 2003. Portfolio optimization of small scale funds using mean-absolute deviation model …

link.springer.com [PDF]

… In this case, we interchange the risk and the rate of return and consider the following problem … American Journal of Agricultural Economics, 53: 53–62 … [Crossref], [Google Scholar]; Konno, H. 2003. Portfolio optimization of small scale funds using mean-absolute deviation model …

www.jstor.org [PDF]

… In this case, we interchange the risk and the rate of return and consider the following problem … American Journal of Agricultural Economics, 53: 53–62 … [Crossref], [Google Scholar]; Konno, H. 2003. Portfolio optimization of small scale funds using mean-absolute deviation model …

onlinelibrary.wiley.com [PDF]

… In this case, we interchange the risk and the rate of return and consider the following problem … American Journal of Agricultural Economics, 53: 53–62 … [Crossref], [Google Scholar]; Konno, H. 2003. Portfolio optimization of small scale funds using mean-absolute deviation model …

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… In this case, we interchange the risk and the rate of return and consider the following problem … American Journal of Agricultural Economics, 53: 53–62 … [Crossref], [Google Scholar]; Konno, H. 2003. Portfolio optimization of small scale funds using mean-absolute deviation model …

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Absolute rate means a combination of reference rates and premiums or discounts.

The fixed portion of an interest-rate swap is a percentage that represents the difference between the reference rate and the premium or discount.

You can calculate it by subtracting any discount from 100%, multiplying by 100, adding any premium to this number, and dividing by 100. For example, if LIBOR is at 5%, then you can take 95%-5%=90%, multiply that by 100=9000, add 5%-0%=5%, divide that by 100=0.05. This gives you 9%.

An example would be if LIBOR was at 3% and there was a 7% premium, then the absolute rate would be 10%. Another example would be if LIBOR was at 3% but there was no premium, then the absolute rate would be 0%.

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