Financial Exam Help 123

Category: Level III

  • Variance Swaps

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    by

    Bill Campbell
    in

    Variance swaps more closely resemble forward contracts – or forward rate agreements (FRAs) – than they do swaps (e.g., plain vanilla interest rate swaps, or equity swaps).  Whereas most swaps have more than one payment, variance swaps (and forwards, and FRAs) have a single payment.  However, given the penchant of finance folks to ascribe inaccurate…

  • Short Bearish Seagull Spread

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    by

    Bill Campbell
    in

    If you haven’t read the article on option strategies in general, that’s a good place to start, then return here. In particular, if you haven’t read the warning about calculating profit that appears at the end of that article, you should go read it now; the way I’m calculating the profit here is correct, but…

  • Long Bearish Seagull Spread

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    by

    Bill Campbell
    in

    If you haven’t read the article on option strategies in general, that’s a good place to start, then return here. In particular, if you haven’t read the warning about calculating profit that appears at the end of that article, you should go read it now; the way I’m calculating the profit here is correct, but…

  • Short Bullish Seagull Spread

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    by

    Bill Campbell
    in

    If you haven’t read the article on option strategies in general, that’s a good place to start, then return here.  In particular, if you haven’t read the warning about calculating profit that appears at the end of that article, you should go read it now; the way I’m calculating the profit here is correct, but…

  • Covered Call

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    by

    Bill Campbell
    in ,

    If you haven’t read the article on option strategies in general, that’s a good place to start, then return here.  In particular, if you haven’t read the warning about calculating profit that appears at the end of that article, you should go read it now; the way I’m calculating the profit here is correct, but…

  • Protective Put

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    by

    Bill Campbell
    in ,

    If you haven’t read the article on option strategies in general, that’s a good place to start, then return here.  In particular, if you haven’t read the warning about calculating profit that appears at the end of that article, you should go read it now; the way I’m calculating the profit here is correct, but…

  • Long Bullish Seagull Spread

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    by

    Bill Campbell
    in

    If you haven’t read the article on option strategies in general, that’s a good place to start, then return here.  In particular, if you haven’t read the warning about calculating profit that appears at the end of that article, you should go read it now; the way I’m calculating the profit here is correct, but…

  • Seagull Spreads

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    by

    Bill Campbell
    in

    The reading on currency management briefly mentions seagull spreads, and suggests that there are two types: long seagull spreads and short seagull spreads.  Apart from the fact that there are actually four types of seagull spreads (I’ll get to them in a moment), the biggest problem is that they never show a payoff diagram for…

  • Inter-Market Curve Positioning

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    by

    Bill Campbell
    in

    As a gift to the candidates studying for the Level III exam in 2019, CFA Institute replaced the existing Level III Fixed Income readings with new Fixed Income readings.  Amongst the new readings was one entitled Yield Curve Strategies, and included in that reading was a section on Inter-Market Curve Strategies, including, in particular, inter-market…

  • Singer-Terhaar Model

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    by

    Bill Campbell
    in

    So . . . you woke up this morning and said to yourself, “I feel like estimating the risk premium for an equity market.  But not just any old equity market.  I want to estimate the risk premium for an equity market that is only partially integrated with global markets.”  Deep down, you’re a thrill…