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An investor has entered into a forward rate agreement (FRA) where she has contracted to pay a fixed rate of 5 percent on $5,000,000 based on the quarterly rate in three months. If interest rates are compounded quarterly, and the floating rate is 2 percent in three months, what is the payoff at...

A bank entered into a 4-year tenor plain vanilla swap exactly three years ago from today. The agreements of the swap are to pay 6.5 percent annually, based on annual compounding with a 30/360 day-count convention, fixed rate on a $50 million notional, and receive 1-year London Interbank Offered...

I haven't yet received the admit card. Anyone else in same boat?

Hi All & David, I have created a easy reference sheet for Options Strategies. I understood the underlying fundamental on how to deduce the payoffs for various strategies. But where I was struggling was to "remember" which strategy has what payoff and felt the need to have a consolidated view...

From the formula perspective it is easy to learn and see the difference between Treynor vs sharpe. But I am still struggling to warp my head around conceptual interpretation of beta and std dev. for portfolio. Imagine Beta and Std like a 2X2 matrix. - When does (in which market condition) is...

Hull.04.12: 04.12a. A 3-year bond provides a coupon of 8% semiannually and has a cash price of 104. What is the bond’s yield? Any idea how do I solve for this in HP 12C? 4e -0.5y + 4e -1.0y + 4e -1.5y + 4e -2.0y + 4e -2.5y + 104e -3.0y = 100 With yield = 7.588%

hi All I have a basic question ... but confuses me - are risk free rate and zero curve same? We use zero curve to calculate PV of bonds cash flow, but we can use risk free too, right? If this is answered specifically in material, you can point me there or any other post. Thanks in advance.

Referring to this topic " When yields on bonds are below 6% (e.g. 3%) the CTD bond...". Where is the "6%" number coming from? Is this rule of thumb?