For some reason I am having trouble with this topic again this year. I can follow the reasoning in the book, but if I don’t look at it for a few days I feel like a deer in the headlights when I see all those inflation, interest, spot, and forward rates. Does anyone have any tips on dealing with this material?
If you are a visual learner, CFAI materials have a nice picture with all the parities. That’s how I learned all the relationships.
I found this topic on the 2008 L2 Schweser videos very helpful with this. The chick that talks about it does a very good job explaining in non-numerical terms how to think about the relationships. Try and ignore all of her hand gestures though.
I agree with GMof…