1 / 5

Hand-out

Hand-out. Test Exam #1 w/ answers. Hand-written is what you get – for several reasons . Test Exam #2 (pink.) How do we play this? Cheat Sheet (yellow.) But for God’s sake don’t take the name literally . No course plan or slides. Today: Swaps & Test Exam #1.

skam
Download Presentation

Hand-out

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Hand-out Test Exam #1 w/ answers. Hand-written is what you get – for several reasons. Test Exam #2 (pink.) How do we play this? Cheat Sheet (yellow.) But for God’s sake don’t take the name literally. No course plan or slides. MATH 2510: Fin. Math. 2

  2. Today: Swaps & Test Exam #1 Hull’s Chapter 7 on swaps in just two slides. There won’t be exam questions on swaps. Remaining parts of Test Exam #1 • Question E. (When you’re are asked to “comment on” something, that something is usually wrong.) • Question D. One formula you must learn by heart. You can get a lot of mileage out of it. MATH 2510: Fin. Math. 2

  3. Hull’s Chapter 7: Swap contracts An agreement to exchange (”swap”) one series of payments for another – from simple to very complex. A forward is – by that definition – a swap. The ”plain vanilla” interest rate swap tranforms fixed interest payments into variable interest payments. (”Fixed for floating.”) Common. Swaps are frequently used across exchange rates. MATH 2510: Fin. Math. 2

  4. W’s of Swaps What, I? Previous slide. How? A plain vanilla interest rate swap can be valued without a dynamic model. Surprising. Why? A comparative advantage argument. And its perils. What, II? Complex swaps. (Procter & Gamble swap, credit default swaps, …) MATH 2510: Fin. Math. 2

  5. Exam Advice • Be brief, be quick. • It’s not a beauty contest – I can read my own hand-writing, I can sure as h*¤# read yours. • Questions are independent, so if you get stuck, go on. • Partial credit is given (a lot.) Give it the old college try. MATH 2510: Fin. Math. 2

More Related