# Dude why does CFAI love swaps so much?

Just venting, but seriously IMO a little much on the swaps and what not.

I like it:) Especially at L2 - best readings from curriculum…

derivatives in general make me want to drill my brain out through my eyeballs

Totally agree, the derivatives make me want to jump out the window. Remember, though, that they are only 5-15% of the exam. I may have to use the same strategy I used for them on L2- make sure I can answer all the qualitative questions and then just guess on the quant ones. Worse case you are looking at 18 derivatives questions. If half of them are quant and you completely guess you should only get 6 wrong max, which isn’t bad for a worst-case scenario. I’m going to over-study the wealth management section and not worry about being able to do every last derivatives problem.

^ here’s the problem with that though T2… what about when you get a big derivs q in the AM section? L3 is a whole new ballgame. welcome. derivs are big on this level and the lines b/t sections and weightings are fuzzier in L3 than any other level. you can’t avoid derivs here. it would be a very bad idea.

CFAI loves swaps because questions that require a specific series of calculations are the best way to discriminate between candidates that have prepared for the exam versus candidates that haven’t. Bright candidates can often eliminate one choice in a word problem by being smart and half-prepared. But if you haven’t thoroughly understood and practiced swaps, good luck guessing whether the correct answer is A) \$2,387 B) \$2,479 or C) \$2,564

because more candidates have been pwned by them than any other financial instrument.

An article in Economist: http://www.economist.com/node/18289296?story_id=18289296

I think you probably meant to link to this one… Proposed rules on taming swaps markets are proving controversial http://www.economist.com/node/18285615

Wendy Wrote: ------------------------------------------------------- > I think you probably meant to link to this one… > > Proposed rules on taming swaps markets are > proving controversial > http://www.economist.com/node/18285615 Oops

Not sure why CFAI likes swaps so much, but swaps are really important. Imagine if banks could not manage duration.

From my understanding, the CFA curriculum tries to emphasize areas that have impacted the markets in recent times. I could see why they would would focus on swaps (e.g. CDS)

i wonder if they love ATM too?

I love lamp.

Do you really love the lamp, or are you just saying it because you saw it?

i love…desk?

builders Wrote: ------------------------------------------------------- > i wonder if they love ATM too? ATM? ATM 1 & 2 were classic genre defining movies … whats not to love

Because swaps are the only innovative thing to come out of Finance since ATMS.

because swap and swaption can incorporate so many areas including discount value and futures, options, currency hedge, interest rate parity, and so on. a test of your overall comprehension of the financial knowledge. Charles