skycfa

p533.
It is specifically mentioned in the text that "Gide plans to invest the sale proceeds in six-month..." on p532, point no.1, line no. 5.

p526.
Text is correct. A callable bond issuer is also call option holder. However, a putable bond issuer is not put option holder. Rather, the putable bond holder has the right to sell the bond back to the issuer (a put option). Therefore, a nonputable bond issuer should sell a payer swaption (similar to issuing a put option)

p502.
Text is correct. Example 7 relates to a synthetic bond. Actual bond is a single currency dollar bond paying coupon in dollar of $1.1Million. There is no coupon payment in Swiss franc. However, issuer is synthetically creating a swiss franc exposure by entering into a currency swap.

p457.
Text is correct. If we have written options on 100 shares, we need to own (100 X delta) shares. As it discusses in the next few lines. We use 100/delta in a different situation (i.e. when we own stocks and want to calculate number of options to write)

p434.
You need to add 200bp spread to 5.5%

p427.
Here, collar is not referring to the interest rate collar created by a borrower. Rather, collar here refers to an investment strategy using options. These options can be on any asset (e.g. stocks, bonds). S0 represents spot price of the underlying asset

p421.
Best would be an excel sheet for all these formula. Saves lot of time while doing practice.

p516.
Swaption is purchased way earlier than the offsetting date. However, another offsetting swap can be done only on the offsetting date. Swaption is like insurance. You pay upfront and then get protected from adverse price/rate movements. Refer page 519 for further details.

p472.
Bull call spread is an advanced version of long call strategy. Idea is that we think that asset price will rise and we are willing to invest our money in anticipation of the rise in price of the underlying asset (i.e. buying a call option with exercise price of $75). However, we also think that asset price will not rise much. We can reduce our initial investment by selling a call option for $2 with an exercise price of $85. This makes our net investment $8 instead of $10.

p461.
Here, calculation is of "value of position" not "cash flow". As we have taken a loan, therefore, we have a negative position.

p465.
For Long (Call) Put, Gamma is (negative) positive when option is near or at the money. Gamma is zero for both call and put options if these are out of the money or deep in the money.

Any more questions ?