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I am trying to understand why KRD levels are most sensitive closer to the maturity of a pay-fixed swap. Let’s say for example, I have a 10-year vanilla pay-fixed swap. The KRD is highest at the 10yr, around 4.54. One side of the transaction is fixed and the swap is essentially a bet on LIBOR...

Hi David! I was looking at your video labeled: Hull, Options, Futures & Other Derivatives, Chapter 13: Binomial Trees. Can you help me with your backward induction formulas. For a point of reference, please go to 28:34 of your lecture. I understand all the numbers at the second node, its the...

If anyone is sitting for the FRM part 1 exam in May that lives in DC, please reply and we can create a study group.

I am having trouble understanding Slide 34 in Chapter 13 (Elton). The question is: What is the expected return on an asset with a Beta of 2.0? I understand you use the CAPM formula but I do not understand how you get the answer. 12% = Rf + 1.5(Rm-Rf) - I understand 6% = Rf + .5(Rm-Rf) - I...