Swaps (FRM Part 1 2023 - Book 3 - Chapter 10)

[@jacklingomes9137]

I love your classes. You make learning heavy concepts so easy :D

[@analystprep]

Happy to hear that! If you like our video lessons, it would be appreciated if you could take 2 minutes of your time to leave us a review here: trustpilot.com/review/analystprep.com

[@linaelmoutaki5610]

thank you professor

[@analystprep]

You're welcome! If you like our video lessons, it would be appreciated if you could take 2 minutes of your time to leave us a review here: trustpilot.com/review/analystprep.com

[@abdullahnarejo1259]

sir, can you please explain where does floating cash flow comes from?

[@yvesprimeau6031]

In your comparative example is it what happen when cies does shadow banking ?

[@mundrakeshav22]

Dear Sir, could you explain the break up of 7.75% that B would pay to A as a simple equation ?

[@chiragpatodi7542]

Are you frm holder?

[@mundrakeshav22]

@@chiragpatodi7542 matter of fact I cleared FRM Level 1 in Dec,2021 and a recently qualified CA in May,22.

[@chiragpatodi7542]

Thanks for the reply. I am also a CA Finalist. I just want to know your view on FRM cirtification course.

[@ducthien0224]

could you please show how to work out the fixed rate of 7.75% that B pays A and the floating rate of (Libor+2.5%) that A pays B as they enter in the swap to get that even gain of 0.25%? Thanh you!

[@analystprep]

Hi, Thien. First, we have to understand that 8 % = 800 basis points. Then, the formula is (800 bps - 600 bps) - (LIBOR + 250 bps - (LIBOR + 100 bps)) = 200 bps - 150 bps = 50 bps. We then divide this by 2 to get 25 bps. I hope this helps!

[@ducthien0224]

AnalystPrep thank you, sir!

[@cade7458]

Thank you my professor did not do a good job teaching this.

[@analystprep]

You're welcome!