Is there anywhere that gives a cogent explanation of Spot Rates relating to FRAs? I cannot seem to figure out how that works for the life of me. That and anything relating to covariance, variance, std dev, and hypothesis testing. If I fail, it will be because of these.

Check out the bionic turtle videos on youtube. I too was completely stumped on forward rates until I watched his videos and now I find myself easily solving those types of problems. Bionic turtle also has some very good videos for hypothesis testing. As for std dev, variance, and covariance, you really just have to memorize the various ways to calculate the information. I could be totally wrong but my guess is we won’t have to calculate covariance of two assets given their historical annual returns over 5 years or something along those lines. That is a time consuming calculation and I just don’t expect it on the exam. I think it’s much more probable that we’d see a covariance calculation given both assets’ std deviations and their correlation. I could be wrong though.

I forgot about bionic turtle…David Harper is awesome. I should have been watching him all along. We’ll go over the stats stuff tonight