Course Errors Found in 2023 Study Materials P1.T3. Financial Markets & Products

[Nicole Seaman]

Please use this thread to let us know about any errors, missing/broken links, etc., that you find in the 2023 materials in P1.T3. Financial Markets & Products. This will keep our forum much more organized. We appreciate your cooperation!

PLEASE NOTE: Our Practice Question sets already have links to their specific forum threads where you can post about any errors that you find. This thread is for any other materials (notes, spreadsheets, videos, etc.) where you might find errors.

Information needed for us to correct errors:

• Reading
• Page number
• Error

 

[FLiew9434]

Hi @Nicole Seaman FYI the corresponding link in the study notes on page 1025 is faulty on my end (redirects me to https://forum.bionicturtle.com/threads/l1-t3-174-interest-rate-swap-mechanics-20 instead). You may want to take a look, thanks!

 

[HLeun3829]

Hi @David Harper CFA FRM, hope you're doing well.

In relation to the short put paragraph in p.7 of the study notes for chapter 12 options markets (attached the screenshot below), understood that the short put option will not be exercised if the final stock price at expiration is greater than $70.

Therefore, shouldn't the following sentence in the second bullet point be "if the final stock price at the expiration is between $63 and $70, the option will be exercised"? Since only under this circumstance will the seller profit less than $700 after the exercise of the put option.

And for the third and last bullet point, shouldn't the sentence be "if the final stock price at expiration is below $63, the writer will suffer a loss"?

Please correct me if i'm wrong. Many thanks for your help!

 

[gsarm1987]

Hi @David Harper CFA FRM, hope you're doing well.

In relation to the short put paragraph in p.7 of the study notes for chapter 12 options markets (attached the screenshot below), understood that the short put option will not be exercised if the final stock price at expiration is greater than $70.

Therefore, shouldn't the following sentence in the second bullet point be "if the final stock price at the expiration is between $63 and $70, the option will be exercised"? Since only under this circumstance will the seller profit less than $700 after the exercise of the put option.

And for the third and last bullet point, shouldn't the sentence be "if the final stock price at expiration is below $63, the writer will suffer a loss"?

Please correct me if i'm wrong. Many thanks for your help!

View attachment 4070

I reckon the first bullet must have meant greater than $77

 

[AUola2165]

The video for "Instructional Video: Mortgages and Mortgage-Backed Securities" ends at mid-sentence while covering Monte Carlo simulation. Maybe due to an error in video editing, the last learning objective is not covered.

 

[Nicole Seaman]

The video for "Instructional Video: Mortgages and Mortgage-Backed Securities" ends at mid-sentence while covering Monte Carlo simulation. Maybe due to an error in video editing, the last learning objective is not covered.

Thank you for pointing this out. I will take a look at this to see what the issue is.

 

[David Harper CFA FRM]

Hi @HLeun3829 Sorry for the delay responding and yes, I agree with you, it's a mistake in our notes. This is a short ITM put where, S(0) = 65.00, K = 70.00 and p = 7.00 such that it will get exercised if S(t) < 70.00 and the final two bullets should read:

• If the final stock price at the expiration date is between $63.00 and $70.00, the option will be exercised, and the trader will make a profit of less than the $700.00 premium received.
• If the final stock price at expiration is below $63.00, the writer will suffer a loss