Schweser Errata

Holy sh1t. I just looked at the Schweser Errata, and there’s a lot of stuff on there. Anyone go through all this crap? It looks like a lot of sh1t that I was counting on being right is actually wrong… For example, the duration of a floating rate payment is actually 1/2 of the time until the next payment, where Schweser said that it was = time until next payment. I guess I better look through this crap.

i don’t know why but i never actually sit down and go over all the errors like i should. not very smart. i

McLeod81 Wrote: ------------------------------------------------------- > Holy sh1t. I just looked at the Schweser Errata, > and there’s a lot of stuff on there. Anyone go > through all this crap? It looks like a lot of > sh1t that I was counting on being right is > actually wrong… > > For example, the duration of a floating rate > payment is actually 1/2 of the time until the next > payment, where Schweser said that it was = time > until next payment. > > I guess I better look through this crap. mcleod, i’d brought up the half time until the next floating rate payment. one line hidden in the institute’s main text (it is there) and completely different than level 1. and as you said, it’s not in schweser. also, was doing currency question today and they did calculation wrong, but really sitting there you have no idea. as you’ve seen, sometimes i’m very right in questioning things and just as often very wrong. anyway, there’s some pretty heavy stuff in the errata for sure.

spent a lot of time last week going through all this stuff. yeah, it took awhile.

nice, there’s a 3 page swap - credit risk question that was left out… I guess this explains why I didn’t think that was part of L3 when I came across this in a practice exam.

McLeod81 Wrote: ------------------------------------------------------- > nice, there’s a 3 page swap - credit risk question > that was left out… I guess this explains why I > didn’t think that was part of L3 when I came > across this in a practice exam. thanks for the heads-up… i knew there was vignette missing. didn’t know it was important. will check it out.

McLeod81 Wrote: ------------------------------------------------------- > nice, there’s a 3 page swap - credit risk question > that was left out… I guess this explains why I > didn’t think that was part of L3 when I came > across this in a practice exam. That credit risk on a swap isn’t as intimidating as it looks. You will be fine with it.

yeah, i thought it was level 2 stuff until i saw it on an exam. what’s up with schweser this year? seems like more errors than normal. leaving vignettes out??

It is quite confusing to say the least considering the material barely changed this year.

I concur that swaps are pretty damn easy. Calc your discount factors, multiply by the payments, subtract PMT from REC and BOOM, you’ve got your credit risk.

swaps are also easy to eye which party is owed the payment. that should eliminate at least 1 out of 3 answers right there.

McLeod- actually duration of floating side (at 1/2 maturity) is in Schweser…pg 93 book 5. it uses it in context of “average duration”

but the problem on the past exam was an am question where you had to show your work… i got partial by picking who bore the credit risk, but was lost on figuring out the amount. then i found the schweser errata.

^ that makes more sense. Thanks for the heads up, I’m going to re-read CFAI for this one.