Hi All- I am really confused about how to price and value equity swaps. It seems to me that they are priced in the same way that rates swaps are priced. However if you listened to the Schweser online course, they mentioned that the rates swaps pricing has changed and now the curriculum is simplified for valuing a swap between dates, we even received some simplified slides. However when I read Cfai they still seem to be using the more complex technique in valuing the equity swaps.

Can you please help? I don’t even understand which formulas to use. Thank you in advance

Equity swaps and plain vanilla interest rate swaps are valued identically, bearing in mind that the present value of the equity leg is the notional value increased or decreased by the equity return since the last settlement date.

Honestly, it’s really disappointing how CFA is explaining in general SWAP but in particular equity swap.

Just one example, without saying to much… and then each time you do an exercise you find out something new. Even after 7 complete Mocks (5 Schweser 1 CFA and one FITCH (fitch mocks are really bad: bad written, zero explanation in the solutions…)).