Quick formula to calculate SWAPTION on Mock 2012
Normally to calculate swap I would go step by step, PV of fixed payment , PV of floating payment
In question 43 to calculate RECEIVER SWAPTION, can anyone please explain the rationale for it, especially why they subtract 0.969 from return of index (15%)?
P/S: Do you usually do quick way like this or you would go step by step to make sure you dont miss anything ( but chance of mistake increase) |