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FINANCIAL MARKET COURSES

Swaps - Applications for Institutional Investors

Institutional investors can be grouped as leveraged and unleveraged. These investors vary in their investment approach, but commonly apply swaps to achieve their goals.

 

In this course, you will learn about the different types of institutional investors and learn how to measure their performance. The course also explains the use of swaps by these investors with respect to activities such as hedging, capital generation, and risk management.

  • OBJECTIVES

    On completion of this course, you will be able to:

    Define the business goals and objectives of asset managers, hedge funds, and other institutional investors

    Describe how these market participants use swaps to achieve their goals and objectives

  • COURSE OUTLINE

    Topic 1: Institutional Investor Objectives

    Asset Managers

    Unleveraged Portfolio – Performance Measurement

    Unleveraged Managers – Performance of Portfolio

    o Security Selection

    o Average DV01 Adjustment

    Leveraged Asset Managers – Financing a Position

    Leveraged/Unleveraged Managers – Use of Swaps and Derivatives

    Topic 2: Applications of Swaps for Institutional Investors

    Swaps – Applications

    Unleveraged Asset Managers – Hedge against Portfolio

    Unleveraged Asset Managers – Adjust DV01 of a Portfolio

    o Hedge against Rate Increase

    o Hedge against Rate Decrease

    Leveraged Asset Manager (Hedge Fund) – Swaps as Synthetic Financed Bonds

    o Receive Fixed and Pay Libor

    o Pay Fixed and Receive Libor

    Interest Rate Swaps and Synthetic Financed Bonds Position – Compare and Contrast

    Swaps to Express a Yield Curve Trade

    Swaps to Express a Yield Curve Steepening Trade

    Swaps to Express a Yield Curve Flattening Trade

    Swaps to Express Relative Value Trades

    Swaps to Express an Opinion on Swap Spreads

    o Swap Spread Widening

    o Swap Spread Narrowing

    Financial Institutions – Swaps to Hedge Their Asset Portfolios

    Structured Products (Hybrid Securities

  • PREREQUISITE KNOWLEDGE

  • ESTIMATED COMPLETED TIME

    75 Minutes

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