I finally finished reading the CFAI curriculum on Swaps and I think I would prefer to drive nails under my fingernails than read proofs and derivations of formulas… but I did it. I don’t mind doing the calculations but learning how they came up with the formulas is so mind numbing!
read this … much better and easier. fwiw - you really do not need Mr. Chance’s formulae to solve swaps. you need the process outlined below. http://www.analystforum.com/forums/cfa-forums/cfa-level-ii-forum/9749056
Thanks Cpk123. Both the explanations for IR swap and FX Swap by Jscott24 are great and much simplified. biteme - try and simplify and go over few times. Helps me.
But swaps are very useful in real life. It’s worth knowing how they work.
I’ve done the interest rate and currency swaps and so far they’re not that bad. It’s not calculating them that’s hard, it’s reading the chapter before I started doing the calcs that was killing me. I read the summary of the chapter after reading the chapter and I can’t believe how ridiculously complicated it sounded. But thanks cpk123 for posting that thread.