CIIA Exam Preparation

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What is required of Institutional Sales i.e. to Swiss Pension Funds

As I used to work in sales trading I thought it was interesting what investment banks or global players in the industry are currently looking for: At least 5-7 years’ experience in selling investment products/solutions to institutional investors i.e. Swiss pension funds.Master degree, CFA or CIIA preferredEstablished client network is a plusUnderstanding of Swiss pension fund clients, their investment needs and restrictions is preferredUnderstanding of capital markets, proven ability to…

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CIIA: How to use discount factors to calculate spot rate

  Using discount factors to find the final discount factor in a series If I already have several discount factors I can use them to calculate the following years’ discount factor; What I need to know is the number of years to maturity, the coupon and the current price.   With those values I can form an equation; PV = CF or CPN * sum of given discount factors +…

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CIIA: Why is a flexible exchange rate better than a fixed exchange rate?

why-is-a-flexible-exchange-rate-better-than-a-fixed-exchange-rate.pdf If positive inflation differentials occur and the exchange rate is fixed, the real exchange rate will appreciate. An appreciating exchange rate makes the country less competitive. However a flexible exchange rate acts as a buffer, a shock absorber, an automatic stabiliser. So if the inflation rates change there will be an equivalent change in the nominal exchange rate. This in turn leads to the real exchange rate remaining constant….

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Economics: Uncovered Interest Rate Parity (UIP)

CIIA_Economics_Currency_UIP_Uncovered_Interest_Rate_Parity_Question_Solution Question setup In intro text: „In September 2008 the US Fed fund rate was 2%, while one dollar bought 0.68 Euros.“ In question c) „…bear in mind that the price of one dollar reached a peak of about 0.80 Euros in November 2008…“ Actual question Briefly present the uncovered interest rate parity (UIRP/UIP) equation, and then assuming that UIRP/UIP holds, exploit it to forecast the three months movement of…

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CIIA: Derivatives – Cross-Currency Swap Problem

Question Setup Actual Question Formula Collection Solution Note that formula has to be rearranged versus the formula collection as we have borrowed in local currency first. This can be seen in the first paragraph of the question setup (I’d missed it and used the formula as given instead of rearranging to take account of that fact).