I am a bit confused on how you calculate vega for Interest Rate Swap.
One argument is that IR Swap is a combination of fixed rate bond and floating rate bond. Since a bond has no vega component, IR Swap has no vega component.
Another argument is that IR Swap can be synthetically reproduced using a cap and floor. For pay fixed and receive floating side, it is a long a cap and short a floor. Since both cap and floors are options on IR, there is a vega component.
Since these two arguments contradict themselves, which is right and why is the other wrong?
Need some guidance on this.