Spot Rates and Forward Rates (SOA Exam FM - Financial Mathematics - Module 4, Section 6)

[@nominasuntodioza2725]

This is one of the most informative and mathematically correct explanation of the idea on KZbin. Thank You professor!

[@surendrabarsode8959]

Explanation is spot on! Thanks.

[@adampecsek]

I am learning spot-forward conversion now through Kaplan Schweser, and found it really confusing. The math is uncomplicated, but I was having a hard time intuiting what exactly was going on in this conversion. Your explanation is so clear and concise. Wish I had found it a few days ago!

[@ruijialiu3436]

same here lmao

[@real_sdj]

Thank you so much. This helps me a lot for my CM1 exam!

[@analystprep]

Glad it helped!

[@safiagha8002]

Also it could be due to risk and opportunity cost of tying up capital. Longer the term of loan agreement higher the risk of default because things can change over 30 years compared with just 5 or 10 years! Higher the risk more compensation is needed

[@mathaela3026]

Thank you!!

[@analystprep]

You're welcome!

[@investwithvincent6329]

Hi... at point @15:00 it is mentioned that the term structure needs to be flat in order for immunization to take place. What if the term structure was inverted or upward, how does this affect immunization?