I fell in love CFAI books after reading these topics… are there anymore topics which schweser doesn’t even mention in their notes?
cuspy coupon — in Fixed income section …
is it that this could be oversight by schweser or they thought its not imp to include them in notes cant believe they have missed it by chance otherwise it would have been in the errata? y not there in schweser?
its not that difficult … u just have to add a call option to the 2 bond hedge portfolio … it is important accd to me
hedging or adjusting structure products with swaps is not in the curriculum. anyway, if you read the CFA text, they always do the same: issue a bond for a notional = “x”, but they do a swap with a higher notional, that is where the coupon of the structure product comes from regarding cuspy coupon, zidane2 (great name, awesome) is right, they only mention that you can hedge (more) if you also buy an option on interest rates