Financial Derivatives: Introduction to Interest Rate Swaps
What you'll learn
- Students will gain an understanding of interest rate swaps ,its pricing and valuation as well as how these derivatives are used in the financial markets
- Students will be able to articulate how an interest rate swap is priced
- Students will understand different components of an interest rate swap such as discount factors/zero rates and forward rates
- Students will be comfortable with calculations for discount factors/zero rates and forward rates
- Students will be exposed to real life case studies of how interest rate swaps are actually used in the marketplace
- A fundamental knowledge of bonds would be useful .
This course is beneficial for those who are seeking careers in risk management/portfolio management/treasury/derivatives trading. In simple and intuitive language the concepts are broken down to help you understand what an interest rate swap is, how its traded in the market, how it is priced and valued by big banks and vendors as well as real life case-studies of how these tools are used to hedge and speculate. The step by step breakdown is what you will encounter if you pursue a career in fixed income derivatives.
This course also has some overlap with the CFA/FRM certifications and shows on excel what the specific product is designed to do. While no familiarity with derivatives is required, it is certainly helpful as interest rate swaps are more of an intermediate level of derivatives that are traded in the markets today. As some of the highest volume trading instrument in the world, anyone who wants to break into finance will need to graph concepts of zero rates/discount factors and net present values well. Understanding how swaps are built and being able to articulate clearly how they derive their value will help you with interview prep and will also help you defend the prices of your products to counterparties once you actually land the dream job!
Who this course is for:
- Beginner students interested in derivatives
Having worked as an Advanced Derivatives specialist and Fixed Income specialist for close to 9 years in one of the world's largest finance and data providers, I am extremely familiar with how clients use and deploy derivatives to achieve their objectives. Teaching has been a part of my career and educating students in the world of multi asset derivatives is something I am passionate about.