I am reading chapter 60 and getting very scared with the amount of formulas and terminology. Could someone please give some context for the upcoming material in the derivatives sections. Are the next 5 chapters equally bad, easy or harder?? compare to the chapter 60. I think at this point I might just have to add derivatives to the list of things that I don’t plan to do. List of things i won’t be studying is ever growing…aaahhhh!!!
the qualitative stuff only gets worse the good news is that most of the 40 formulas in those 5 readings are very similar
Just wait til you get to Swaps. Much worse. The formulas in reading 60 are all basically the same with slight variations (except for FRAs). You’ll get the hang of it as you look at them more. Just keep plugging away and review the formulas often
no need to be scared. If I were in your position, I would tackle the most frequently areas such as: -basic future and forwards pricing and valuation -currency future, pricing, valuation, arbitrage -bond future -options, basic payoff, when to use what -bi-nominal tree on options -caps and floor basics -put call parity -how to use put call parity to create synthetic securities for arbitrage -Black Scholes assumptions -Option Greeks Again, try to cover as much ground as possible. But prioritize if you are pressed for time. Anyone got anything to add?
below are jscott’s posts re: swaps and FRAs (two of the more complicated topics in my opinion in derivs) from last year. i think he’s moved on to L3, but cheers for these jscott!! FRA: http://www.analystforum.com/phorums/read.php?12,754042 swaps: http://www.analystforum.com/phorums/read.php?12,749056,749810#msg-749810