Swaps suck!

[biteme]

I finally finished reading the CFAI curriculum on Swaps and I think I would prefer to drive nails under my fingernails than read proofs and derivations of formulas… but I did it. I don’t mind doing the calculations but learning how they came up with the formulas is so mind numbing!

 

[cpk123]

read this …. much better and easier.
fwiw - you really do not need Mr. Chance’s formulae to solve swaps.
you need the process outlined below.
http://www.analystforum.com/forums/cfa-forums/cfa-level-ii-forum/9749056

 

[RHZ]

Thanks Cpk123. Both the explanations for IR swap and FX Swap by Jscott24 are great and much simplified.
biteme - try and simplify and go over few times. Helps me.

 

[ohai]

But swaps are very useful in real life. It’s worth knowing how they work.

 

[biteme]

I’ve done the interest rate and currency swaps and so far they’re not that bad. It’s not calculating them that’s hard, it’s reading the chapter before I started doing the calcs that was killing me. I read the summary of the chapter after reading the chapter and I can’t believe how ridiculously complicated it sounded. But thanks cpk123 for posting that thread.