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So that the NPV of both sides of the contract are even. What type of swap specifically? Exact methodology will vary.

"For I am a sinner in the hands of an angry God. Bloody Mary full of vodka, blessed are you among cocktails. Pray for me now and at the hour of my death, which I hope is soon. Amen."
 
duffmt6So that the NPV of both sides of the contract are even. What type of swap specifically? Exact methodology will vary.

Someone in S&T told me make sure you can value derivatives; especially pricing swaps and options.

I understand option pricing like the back of my hand. But i can't seem to find how to price a swap.

 
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wallacewallace222
duffmt6So that the NPV of both sides of the contract are even. What type of swap specifically? Exact methodology will vary.

Someone in S&T told me make sure you can value derivatives; especially pricing swaps and options.

I understand option pricing like the back of my hand. But i can't seem to find how to price a swap.

Value is different than pricing - value will be what the swap contract is worth at some point in time after it is initiated. Pricing will be the values that make the NPV of the swap zero at the initiation of the contract.

I don't really know where to point you for a resource. I learned this stuff from the CFA L2 curriculum, if you can get your hands on that. It's not an easy topic and it's not something you'll be able to do in your head for an interview.

Sorry I can't be of more help.

"For I am a sinner in the hands of an angry God. Bloody Mary full of vodka, blessed are you among cocktails. Pray for me now and at the hour of my death, which I hope is soon. Amen."
 

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