The speaker discusses the valuation of an interest rate swap. At the time the counterparties agree to swap, the value of the swap is nearly 0; each counterparty expects the benefit to change over time as rates change. Each leg of the swap can be treated as a bond, one fixed and one floating. Therefore, th
The speaker talks about how high levels of leverage contributed to the credit crisis. Once the housing market moved lower, there was a move to deleverage by banks and hed
The speaker discusses the effects of the term to maturity on the bonds return. The question really is, who does better on a bond investment, a short term investor or a long term investor. He suggests an investment in a bond is equivalent to a series of forward loans at rates given
The speaker discusses how the financial crisis will only start to being recovery when the TED Spread comes down to normal levels and banks start lending again. The TED spread measures the difference between the 3 month treasury bill rates and 3 month
The speaker presents an educational seminar to prepare students for the CFA exam. This video covers the following topics: interest rate swaps, interest rate caps, Interest Rate Options, Interest rate floors, and forward contracts.
Mike Gasior does a review of the interest rate swap and talks about its place within the derivatives market. Interest rate swaps are the most popular form of a swap which is performed and Gaisor talks about the risks of each counterparty and discusses the motivate for each party to engage in the swap.
The speakers provides detail on valuing a plain vanilla interest rate swap. He suggests that the value of the swap is zero or close to it when it is initiated. For a floating rate payor, fixed coupon payments are received while a floating r
The speaker provides an in-depth explanation of how an interest rate swap can turn a floating rate obligation into a fixed-rate one. Interest rate swaps are done through a financial intermediary who takes a few basis points for performing the swap on behalf of the two counterparties. It is important to note that in a plai
The SBA issued a rule on an emergency basis to make the secondary market for loans more efficient when it comes to pricing. The rule allows lenders to use LIBOR when pricing loans and also allows for loan pools in the secondary market to be created with WAC rates. The mov
The term LIBOR is relatively misunderstood or unknown to many investors. This video does a good job in explaining how the LIBOR rate plays a huge role in the financial markets. LIBOR is an acroynm for the London Interbank Offered Rate. It is the interest rate that bank charge each other for borrowing and it is published in 10 di
The speaker provides an in-depth overview of LIBOR, the London Interbank Offered Rate. It is the rate at which banks will lend to each other on the London interbank market. It is the most widely used benchmark interest rate and very important in setting rates for a variety of financial products, such as
The speaker of this video covers the difference between GDP (Gross Domestic Product) and GNP (Gross National Product). He suggests that the GDP measures economic output based on the location that the good was produced. GNP measures the economic output in terms of ownership. Therefore, if the resources that produce th
This video is a discussion of whether the GDP is an accurate measure of economic progress in the economy. Martin Collier believes that we are what we measure and the GDP does not measure what we value. He suggests that GDP measures money changing hands and counts negatives as positives and excludes very valuable items. H
The speaker discusses how to calculate GDP and also goes into the reason why imports are subtracted from exports when performing the calculation. He provides some common examples of domestic consumer investment, foreign consumer investment, government investment domestically and overseas, and exports.
In part 2 of the GDP Introduction, the speaker covers the components of GDP and how they affect the stock market, bond market and forex market. The speaker goes on to discuss