Interest rate swaps are derivative instruments commonly used by sophisticated investors to allow cash flows on interest earning securities or loans to be exchanged. One of the most common examples of an interest rate swap is when two parties have different terms on loan agreements (e.g. fixed vs. variable interest rates), and one party undertakes payments linked to short-term floating interest rates (such as LIBOR) in order to receive fixed payments. The counterparty to this transaction then undertakes the fixed payments. But how do these interest rate swaps work? Salman Khan of the Khan Academy explains.

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High Anxiety! (Full Show) Sat 25 May 13 \| 09:06 PM	The Young & the Jobless Fri 24 May 13 \| 07:52 PM	Economic Data Beat This Week Fri 24 May 13 \| 07:44 PM	Lois Lerner Taking the 5th, or Not? Fri 24 May 13 \| 07:33 PM	America Back In Business Fri 24 May 13 \| 07:25 PM
Made In the USA ...By China? Fri 24 May 13 \| 07:15 PM	IRS Scandal: The Political Fallout? Fri 24 May 13 \| 07:00 PM	Stick With Cramer Fri 24 May 13 \| 06:58 PM	Creating Long-Term Wealth Fri 24 May 13 \| 06:45 PM	The Power of Positive Thinking? Fri 24 May 13 \| 06:40 PM
Just Getting Started? Know What You Own! Fri 24 May 13 \| 06:25 PM	Cramer: Save No Matter What Fri 24 May 13 \| 06:15 PM	The Week Ahead: Housing Data on the Way Fri 24 May 13 \| 06:02 PM	The Week That Was: Dimon's Good Week Fri 24 May 13 \| 06:01 PM	Cramer Looks Back: Love At First Stock! Fri 24 May 13 \| 06:00 PM
Mad Money, May 24, 2013 Fri 24 May 13 \| 06:00 PM	Options Action Web Extra Fri 24 May 13 \| 05:59 PM	The Final Call Fri 24 May 13 \| 05:58 PM	Fast Money Final Trade Fri 24 May 13 \| 05:58 PM	Good Deal in Groupon Fri 24 May 13 \| 05:53 PM
Can Dish Win the Cable Wars? Fri 24 May 13 \| 05:46 PM	Fine Trade in Refiners? Fri 24 May 13 \| 05:35 PM	Does Motherhood Kill Your Trading Edge? Fri 24 May 13 \| 05:30 PM	Buying Opportunity in Google? Fri 24 May 13 \| 05:30 PM	Wolfgang's Steakhouse Expansion Fri 24 May 13 \| 05:15 PM
One Bull's Big Stock Market Call Fri 24 May 13 \| 05:08 PM	Why One Trader's 'Sort of Spooked' Fri 24 May 13 \| 05:03 PM	Is Market Psychology Changing? Fri 24 May 13 \| 05:00 PM	Options Action, May 24, 2013 Fri 24 May 13 \| 05:00 PM	Beef Prices Concern Traders Fri 24 May 13 \| 04:58 PM

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Interest Rate Swaps: CNBC Explains

Interest Rate Swaps: CNBC Explains

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