25.2 Valuation of swaps The standard approach is to assume that forward rates will be realized This works for plain vanilla interest rate and plain vanilla currency swaps, but does not necessarily work for non standard swaps Options, Futures, and other Derivatives, 5th edition 2002 by John C. HullOptions, Futures, and Other Derivatives, 5th edition © 2002 by John C. Hull 25.2 Valuation of Swaps • The standard approach is to assume that forward rates will be realized • This works for plain vanilla interest rate and plain vanilla currency swaps, but does not necessarily work for non￾standard swaps