Risk Management for Changing Interest Rates: Asset-Liability Management and Duration Techniques
After completing this reading, you should be able to: Discuss how asset-liability management strategies can help a bank hedge against interest rate risk. Describe interest-sensitive gap management and apply this strategy to maximize a bank’s net interest margin. Describe duration gap…
Covered Interest Rate Parity Lost: Understanding the Cross-Currency Basis
After completing this chapter, you should be able to: Differentiate between the mechanics of FX swaps and cross-currency swaps. Identify critical factors that affect the cross-currency swap basis. Assess the causes of covered interest rate parity violations after the financial…
Managing Nondeposit Liabilities
After completing this reading, you should be able to: Differentiate the various sources of non-deposit liabilities at a bank. Describe and calculate the available funds gap. Discuss the factors affecting the choice of non-deposit funding sources. Calculate the overall cost…
Determinants of Interest Rates
After completing this chapter, the candidate will be able to: Define and recognize the components of interest rates, including real risk-free rate, inflation rate, default risk premium, liquidity premium, and maturity risk premium. Explain how the components of interest…
Interest Rate Swaps
AnalystPrep’s Actuarial Exams Preparation Materials For our question bank, study notes, quizzes, and all our video lessons: https://analystprep.com/shop/learn-practice-package-for-soa-exam-fm/ After completing this chapter, you should be able to: Define and recognize the definitions of the following terms: swap rate, swap term or swap tenor,…
Immunization
AnalystPrep’s Actuarial Exams Preparation Materials For our question bank, study notes, quizzes, and all our video lessons: https://analystprep.com/shop/learn-practice-package-for-soa-exam-fm/ After completing this chapter, the candidate will be able to: Define and recognize the definitions of the following terms:cashflow matching,immunization (including full immunization),Redington immunization. Construct…
General Cash Flows and Portfolios
AnalystPrep’s Actuarial Exams Preparation Materials For our question bank, study notes, quizzes, and all our video lessons: https://analystprep.com/shop/learn-practice-package-for-soa-exam-fm/ After completing this chapter, the candidate will be able to: Define and recognize the definitions of the following terms:inflation and real rate of interest,…
Bonds
AnalystPrep’s Actuarial Exams Preparation Materials For our question bank, study notes, quizzes, and all our video lessons: https://analystprep.com/shop/learn-practice-package-for-soa-exam-fm/ After completing this chapter, the candidate will be able to: Define and recognize the definitions of the following terms: price, book value, amortization of…
Loans
AnalystPrep’s Actuarial Exams Preparation Materials For our question bank, study notes, quizzes, and all our video lessons: https://analystprep.com/shop/learn-practice-package-for-soa-exam-fm/ After completing this chapter, the candidate will be able to: Define and recognize the definitions of the following terms: principal, interest, term of loan,…
Annuities/cash flows with non-contingent payments
AnalystPrep’s Actuarial Exams Preparation Materials For our question bank, study notes, quizzes, and all our video lessons: https://analystprep.com/shop/learn-practice-package-for-soa-exam-fm/ After completing this chapter, the candidate will be able to: Define and recognize the definitions of the following terms:annuity-immediate, annuity due, perpetuity, payable m-thly…
