Swap Markets and Contracts von Edu Pristine

Dozent des Vortrages Swap Markets and Contracts

Edu Pristine

Trusted by Fortune 500 Companies and 10,000 Students from 40+ countries across the globe, EduPristine is one of the leading International Training providers for Finance Certifications like FRM®, CFA®, PRM®, Business Analytics, HR Analytics, Financial Modeling, Operational Risk Modeling etc. It was founded by industry professionals who have worked in the area of investment banking and private equity in organizations such as Goldman Sachs, Crisil - A Standard & Poors Company, Standard Chartered and Accenture.

EduPristine has conducted corporate training for various leading corporations and colleges like JP Morgan, Bank of America, Ernst & Young, Accenture, HSBC, IIM C, NUS Singapore etc. EduPristine has conducted more than 500,000 man-hours of quality training in finance.
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... does not endorse, promote, or warrant the accuracy or quality of the products or services offered by Pristine. CFA Institute, CFA ...

.... and Chartered Financial Analyst ® ; are trademarks owned by CFA Institute. The LOS are the sole property of the CFA Institut e. " A swap is an agreement to exchange cash flows at specified future dates according to cer tain specified rules " Traded mostly OTCand are customized to suit the needs of the parties to ...

... Swaps Disclaimer:CFA Institute does not endorse, promote, or warrant the accuracy or quality of the products or services ...

... and Chartered Financial Analyst ® ; are trademarks owned by CFA Institute. The LOS are the sole property of the CFA Institute. " Interest rate Swaps do not require the actual exchange of the notional amount of the contract " Currency Swaps requires the exchange of principal in the respective currencies on initiation and termination of the contract " Swaps ...

... contract Disclaimer: CFA Institute does not endorse, promote, or warrant the accuracy or quality of the products or services offered by Pristine. CFA Institute, ...

... the products or services offered by Pristine. CFA Institute, CFA ® , and Chartered Financial Analyst ® ; are trademarks ...

... organized secondary market 3. Most participants in swaps market are large institutions. Disclaimer: CFA Institute does not endorse, promote, or warrant the accuracy or quality of the products or services offered by Pristine. CFA Institute, ...

... CFA ® , and Chartered Financial Analyst ® ; are trademarks owned by CFA Institute. The LOS are the sole property of the CFA ...

... not traded in any organised secondary market. Most participants in swaps market are large institutions. 2. The correct answer is Counterparty risk. Disclaimer: CFA Institute does ...

... CFA ® , and Chartered Financial Analyst ® ; are trademarks owned by CFA Institute. The LOS are the sole property of the CFA Institut ...

... liability from Fixed rate to floating rate Floating rate to fixed rate Period Libor rate Floating Leg Fixed Leg Net Cash Flow 0 210,000 250,000 (40,000) 1 4.80% 240,000 250,000 (10,000) 2 5.30% 265,000 250,000 15,000 3 5.50% 275,000 250,000 25,000 4 5.60% 280,000 250,000 30,000 5 5.90% 295,000 250,000 45,000 6 4.20% Disclaimer: CFA Institute does not endorse, promote, or warrant the accuracy or quality ...

... , and Chartered Financial Analyst ® ; are trademarks owned by CFA Institute. The LOS are the sole property of the CFA Institute. " Consider the diagram below. Company X (seeking a floating rate loan ) and Y ( seeking a fixed rate loan) go to the bank for a loan and they get the following offers if ...

... payments in one currency while the other party makes payments in another currency Disclaimer: CFA Institute does not endorse, promote, or warrant the ...

... accuracy or quality of the products or services offered by Pristine. CFA Institute, CFA ® , and Chartered Financial Analyst ® ; are ...

... low cost Swaps Dollars For Rupees Swaps Rupees for Dollars I II Disclaimer: CFA Institute does not endorse, promote, or warrant the accuracy or quality of ...

... services offered by Pristine. CFA Institute, CFA ® , and Chartered Financial Analyst ® ; are trademarks owned by CFA Institute. The LOS are the sole property ...

... could also have to be paying variable. This is in the case where equity returns arenegative Both the parties are uncertain about the payments they will receive untill the settlement date. " For some swaps, the equity returns may be comprised of both dividends and capital gains. Disclaimer: CFA Institute does not endorse, promote, or warrant the accuracy or quality of the products or services offered by Pristine. CFA Institute, CFA ...

... benefit dependin gon the structure of the agreement Disclaimer: CFA Institute does not endorse, promote, or warrant the accuracy or quality of the products or services offered by Pristine. CFA Institute, CFA ® ...

... parties to the contract not netted against each other 1. Interest Rate Swaps 2. Equity Swaps 3. Currency Swaps Disclaimer: CFA Institute does not endorse, ...

... endorse, promote, or warrant the accuracy or quality of the products or services offered by Pristine. CFA Institute, CFA ® , and Chartered Financial Analyst ® ...

... of a currency swap 2.In an interest rate swap only interest rate is exchanged 3.Only the net difference between the dollar interest an d the foreign interest is exchanged in ...

... now is 5 .5%. What amount Bank A pays or receives? 1.$0 pay 2.$50,000 pay 3.$50,000 receive Disclaimer: CFA Institute does not endorse, promote, or warrant the accuracy or quality of the products or services offered by Pristine. CFA ...

... the following swap arrangements will net a bank acting as the intermediary 10 basis points per annum and be equally attractive to both X and Y? 1. Short 7.35% and long LIBOR + 0.35% 2. Short 7.35% and long 7.45% 3. Short LIBOR and long LIBOR-0.35% Disclaimer: CFA Institute does not endorse, promote, or warrant the accuracy or quality of the products or services offered by ...

... not requires the exchange of principal. Disclaimer: CFA Institute does not endorse, promote, or warrant the accuracy or quality of the products or services offered by Pristine. CFA Institute, CFA ® , and ...

... swapped at initiation. 2. Interest payments are netted out and .net amount is paid by one who owes it. 3. At the term of the contract notional principals are netted out and the net ...

... net amount is paid by the one who owes it. Disclaimer: CFA Institute does not endorse, promote, or warrant the accuracy or quality of the products or services offered by Pristine. CFA Institute, CFA ® ...

... 6 months for 3 years on a notional principal of $ 10 million. What is the net cash flow in period 3 if 6-month LIBOR at start of period 3 is ...

... ® , and Chartered Financial Analyst ® ; are trademarks owned by CFA Institute. The LOS are the sole property of the CFA Institut e. 1. The correct answer is Both the parties to the agreement benefit 2. The correct answer is Currency Swaps 3. The correct answer is Both parties are uncertain about the return they will receive 4. The correct answer is Only the net difference between the dollar interest and the forei gn interest is exchanged in a currency swap. 5. The correct answer is $50,000 receive. Bank A pays = [0.05*(180/360) (0.05 + 0.01)(180/360)]*10,000,000 = - $50,000, so receives $50,000. 6. The correct answer is Short 7.35% and long 7.45%. The bank would keep the ...

... and net amount is paid by one who owes it. In a plain vanilla interest swap in a single currency the fo llowing steps takes place: Notional principal is generally not swapped at initiation in single currency swaps. Full interest payments are exchanged at each settlement date, each in a different currency Since a notional fund was not swapped, there is no transfer of funds. 10. The correct answer is $25,000. Disclaimer: CFA Institute does not endorse, promote, or warrant the accuracy or quality of the products or services offered by Pristine. CFA Institute, ...