DEFINITION of 'Absolute Rate'
The fixed portion of an interestrate swap, expressed as a percentage rather than as a premium or a discount to a reference rate.
INVESTOPEDIA EXPLAINS 'Absolute 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%.
It is sometimes also referred to as an absolute swap yield.
RELATED TERMS

LIBOR
LIBOR or ICE LIBOR (previously BBA LIBOR) is a benchmark rate ... 
Interest Rate Swap
An agreement between two parties (known as counterparties) where ... 
Premium
1. The total cost of an option. 2. The difference between the ... 
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The condition of the price of a bond that is lower than par. ... 
Swap
Traditionally, the exchange of one security for another to change ... 
ISDA Master Agreement
A standard agreement used in overthecounter derivatives transactions.
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