Plain vanilla: Difference between revisions
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A description meaning that there are no additional non-standard features in a financial contract. | A description meaning that there are no additional non-standard features in a financial contract. | ||
For example, a plain vanilla interest rate swap is a standardised agreement to exchange fixed for floating interest flows, calculated on a fixed notional principal amount over the life of the swap. | For example, a plain vanilla interest rate swap is a standardised agreement to exchange fixed for floating interest flows, calculated on a fixed notional principal amount over the life of the swap. | ||
The term derives from ice cream, where 'plain vanilla' ice cream was historically the commonest and cheapest variety. | The term derives from ice cream, where 'plain vanilla' ice cream was historically the commonest and cheapest variety. | ||
''Also known as Vanilla.'' | ''Also known as Vanilla.'' | ||
Revision as of 21:30, 5 November 2016
A description meaning that there are no additional non-standard features in a financial contract.
For example, a plain vanilla interest rate swap is a standardised agreement to exchange fixed for floating interest flows, calculated on a fixed notional principal amount over the life of the swap.
The term derives from ice cream, where 'plain vanilla' ice cream was historically the commonest and cheapest variety.
Also known as Vanilla.
