@100y i wasn't upset, i just wasn't looking for a metaphysical argument based on trying to find contradictions in my terminology. (such disputes are all too easy to find on the net). Thanks for liking the videos.
yes...true but you urself say in the title of the video we calculate forward rate from spot rates! so obviously the rate on the left is not observable today!
@100y geez you are disagreeable. I use the term "observable" to help convey the idea that the 6 month forward has a current rate. If futures, it will tend to trade (observable); if OTC forward, they may not be observable but can be "inferred" from the spot rates ...
@100y if i promise to sell you a wheat for $9 in six months, that is today's six-month forward/future price. Today's spot rate is what you will pay today. Go forward in time six months: we don't know that future spot rate.
what ur trying to say is intuitively correct but 'theoretically' incorrect. in the last yellow box, the left side is a rate to be decided in the future (hence a RANDOM number), and you equate it to a constant known today (as both rates on right are known today)...if this was possible we could make a lot of money ;) ...
I am a avid follower of your posts. Thanks a lot as it refreshes my old memories. Thanks for your efforts for people like me.
Regards
sowmik 3 weeks ago
@sowmik Hey, thanks for taking the time to post support!
bionicturtledotcom 3 weeks ago
sorry if i upset you...i was just trying to understand.... i like u videos anyhow :D
100y 1 year ago
@100y i wasn't upset, i just wasn't looking for a metaphysical argument based on trying to find contradictions in my terminology. (such disputes are all too easy to find on the net). Thanks for liking the videos.
bionicturtledotcom 1 year ago
yes...true but you urself say in the title of the video we calculate forward rate from spot rates! so obviously the rate on the left is not observable today!
100y 1 year ago
@100y geez you are disagreeable. I use the term "observable" to help convey the idea that the 6 month forward has a current rate. If futures, it will tend to trade (observable); if OTC forward, they may not be observable but can be "inferred" from the spot rates ...
bionicturtledotcom 1 year ago
what is the difference between the two? i thot they were the same
100y 1 year ago
@100y if i promise to sell you a wheat for $9 in six months, that is today's six-month forward/future price. Today's spot rate is what you will pay today. Go forward in time six months: we don't know that future spot rate.
bionicturtledotcom 1 year ago
what ur trying to say is intuitively correct but 'theoretically' incorrect. in the last yellow box, the left side is a rate to be decided in the future (hence a RANDOM number), and you equate it to a constant known today (as both rates on right are known today)...if this was possible we could make a lot of money ;) ...
100y 1 year ago
@100y it's not an (expected) future spot rate, it is a current (observable) forward rate. The entire exercise involves current observable rates
bionicturtledotcom 1 year ago
is it possible to calculate a 1 hour ahead forward rate instead of a 1 year rate
bookajafry 2 years ago
Thanks man
james697 3 years ago
you are my personal finance tutor. Would have failed my course without you. Thanks.
shrivti1 3 years ago
cool! it would be even cool if we also had a link where we could d/l the termsheet :)
DiGioDi 3 years ago
tRUE !!
elitezero2k 3 years ago
I d love to see your classes on Swaps and bond math, your explanations are clear like water
pantherenebuleuse 4 years ago