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==Conputation==
The equation for a Swap Rate Spread is swap rate – Yield on Government Bond. {{Citation Needed|date=June 2025}} <br> This can be computes as the following :. If a 10-year swap has a fixed rate of 4% and a 10-year Treasury note (T-note) with the same maturity date has a fixed rate of 3%, the swap spread would be 1% or 100 basis points: 4% - 3% = 1%.
Like many financial instruments developed within the money markets, swap spreads have been used as a strategy by firms to arbitrage the market and generate a profit on their balance sheet positions.
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