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Complex derivative strategy questions

Discussion in 'SA7' started by no_name, Sep 23, 2020.

  1. no_name

    no_name Member

    Hi - I struggled with understanding the derivative strategy in question 3(i) of the mock paper under timed conditions. Are there any other questions similar to this that I can practice?
     
    no_name, Sep 23, 2020
    #1
  2. Colin McKee

    Colin McKee ActEd Tutor Staff Member

    Hi, It is a tricky question, but like many questions in SA7, they can be quite unique. Its hard to find a question in past exams that matches up closely with this one, but there are many that involve a hedging strategy of some sort where you are asked to "discuss the risks of the strategy", including repo and swap hedging strategies, hedging strategies for specific liabilities, or even structured products.
     
    Colin McKee, Sep 24, 2020
    #2
    no_name likes this.
  3. no_name

    no_name Member

    Thanks Colin - I've not found on as difficult as this when I went through the past papers so wondering if there was anything equivalent. Maybe it's a good sign there isn't!
     
    no_name, Sep 25, 2020
    #3
  4. Colin McKee

    Colin McKee ActEd Tutor Staff Member

    Glad to hear that my Mocks are challenging.
     
    Colin McKee, Sep 25, 2020
    #4
    no_name likes this.

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