f (1,2) = the forward one year forward rate, two years from today
f (3,2) - the three year forward rate, two years from today
f (2,5) = the two year forward rate, 5 years from today
f(2,3) = the two year forward rate, 3 years from today
Is this correct?
It’s the opposite - the first number shows after how many years the forward will begin:
f (1,2) = forward rate for 2 years issued after 1 year
f( 2,3) = three years forward rate two years from today etc.
Thank you Gebura!
I’ve always struggled with such a simple thing, still am in Level 2.
F(j,k)… where k is the length of the loan and j is the years until it starts. Then I step away from FI for a few days or weeks and I’m lost again. Lol.
This is exactly why mocks are key in the last few weeks; because you are forced to conceptualize every subject matter on daily basis. I feel like CFA you can committ about 50-60% LT memory, and the rest u gotta jam in there before you write haha.
a friend help me with this!!!
F(25,45) =
25= wait
45 = invest
total = 70
You got it.
Thanks man!
My pleasure.
What does WAIT, Invest mean?
WAit for 25 years and ivnest for 45 years?
Wait for 25 periods (could be years, half-years, whatever), then invest for 45 periods.