comparative-advantage

  1. Nicole Seaman

    P1.T3.23.7. Interest rate swaps

    Learning objectives: Explain the mechanics of a plain vanilla interest rate swap and compute its cash flows. Explain how a plain vanilla interest rate swap can be used to transform an asset or a liability and calculate the resulting cash flows. Explain the role of financial intermediaries in the...
    • Nicole Seaman
    • Thread
    • cash-flow comparative-advantage confirmation discount-rates financial-intermediaries interest-rate-swaps plain-vanilla-interest-rate-swap simultaneous-bond-positions
    • Replies: 0
    • Forum: FRM® Practice Questions
  2. Nicole Seaman

    YouTube T3-31: Comparative advantage in an interest rate swap

    AAACorp has a comparative advantage in fixed-rate markets, but BBBCorp has a comparative advantage in floating-rate markets (even as it pays more everwhere!). The difference in spreads (in this case, the difference is 0.50% = 1.20% - 0.70%) is the gross total advantage that can be conferred...
  3. Nicole Seaman

    P1.T3.723. Swaps: valuation with OIS and LIBOR, comparative advantage, and currency swap valuation

    Learning objectives: Explain the mechanics of a currency swap and compute its cash flows. Explain how a currency swap can be used to transform an asset or liability and calculate the resulting cash flows. Calculate the value of a currency swap based on two simultaneous bond positions. Calculate...
    • Nicole Seaman
    • Thread
    • cash-flow commodity comparative-advantage currency-swap currency-swap-valuation exotic-swaps libor ois volatility
    • Replies: 0
    • Forum: FRM® Practice Questions
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