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Hi,
I really like the video the tutor did on interest rate swaps with another person.
However I’,m aware that under the F3 syllabus with CIMA we could also be asked around an interest rate swap with the bank that usually has a spread, could you work through an example please?Thanks,
KamHi,
If you have any form of spread then you just use the interest rate that is the most favourable for the bank. That means if you are borrowing then it will be the highest rate.
I’m not aware of having to use spreads and I’ve not seen any questions in the Kaplan text or kit that lead me to think it will be examined, unless I’m mistaken.
Thanks
Chris
Hi Chris,
Is there anything on vanilla swaps? I have seen questions as such on the BPP question kit. Also I sat the exam and I did see two questions on it in the exam.
Thanks,
KamHi Kam,
Yes the swaps that we discuss in the notes and videos are vanilla swaps. The questions in the exam shouldn’t get more complicated than these.
Thanks
Chris
Hi Chris,
Lemme thank you for all the help you’ve been doing with these videos..I have been reluctant to sit for an exam post my last one in 2015….. after i got to know about opentuition, i have started to prepare for my exams again…
I have been looking at Swaps, and i still can’t get to understand ask and bid interest rates. Could you please show us more examples on this and please help me understand with a scenario, maybe, ask and bid rates and which to be used while doing a problem.
Thanks..
Kee
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