Z DM and DM - Struggling

I am honestly struggling.

We have DM, QM, and Z-DM

DM is the spread that you add over the LIBOR to discount your cash flows
QM is the spread that you add over the LIBOR to get the coupon payments you will receive
and whats this Z-DM and how is it related to DM? I am struggling when I read the curriculum about this particular concept

I was confused about why Z-DM < DM with an upward slope curve. Very hard concepts.


did you figure it out? I feel that reading is poorly written

Memorized and looked at some document on internet from some university. I think better just memorize.

In case of floating rate note when we are assuming MRR as flat and not changing over life of bond DM is used as spread while when we are assuming that MRR is changing (spot/forward rates of MRR )then Z DM is being used.Now consider discounting factor it would be MRR(flat)+DM or MRR(Changing)+zDM.when upward slopping average value of MRR(Changing)>MRR(Flat) so ZDM<DM.Dont know if I am making some sense

I guess memorize it. Thanks for trying dumbledore but that made no sense to me.

I’m really struggling these days. I feel every question I’ve had within FI ended up being in the errata eventually and then questions like this just don’t get answered.