Interest rate options

CFA Level III Derivatives
#1

These are very long calculations. Does anybody have a short cut?

This comes on the exam- one mc meaning 3 minute question.

#2

Check out some of the derivative topic tests to get a better understanding of how they’d question you in a MC format. I just did the ‘Allison’ case and it had a relatively simple calc for an interest rate collar.

I guess my point is I doubt they’d ever have you run out like 5 years worth of calcs on a loan with puts/calls on it. But who knows…

#3

Thanks for the tip

#4

I’d be surprised if they gave you more than 2 years. If you can do 1 year and 2 years correctly, you can do 10 years correctly; there’s no benefit to having you do the same calculation multiple times.