6 ms·
I think I understand interest rate swaps and, by extension, credit default swaps and could, if pressed, explain them in a concise and approachable manner. I'm
by rsync 6y ago
I think I understand interest rate swaps and, by extension, credit default swaps and could, if pressed, explain them in a concise and approachable manner.
I'm not sure how complex that really is but it seemed difficult to wrap it all up in my mind at the time.
More interesting:
A complex concept that I don't understand is the relationship between water pressure and water flow rates and how they affect one another. I've had people explain it to me and I'm not even sure they understand it.
- eutropia 6y agoI started trying to explain water flow / pressure by doing dimensional analysis (comparing the units) and I just confused myself. Count me among those that don't understand.
- kroeckx 6y agoI find it easiest to explain it in terms of electricity, which I assume most people here are familiar with. It acts just the same. Pressure, like voltage, is a difference. The flow rate is like the current, how much goes though. A pipe has a resistance that depends on it's diameter and length. You can calculate the resistance of the pipe as the pressure difference over the pipe divided by the flow rate. One thing people might get confused by is why making the opening at the end of the pipe smaller makes the water go faster. What you do in electricity terms is add a series resistor, the total flow rate in the pipe will be lower, but the speed can be higher because it needs to go through smaller opening and so is more concentrated.