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Thanks @David Harper CFA FRM. Yes after reading it a couple of times, I realized I had spent too much time clinging onto the numbers thinking it might mean something glaring. It'd have been simple not to overthink as you correctly point out.

After further reading it seems that any model that follows normal distribution cannot overestimate by construction but can only underestimate because given that normal distribution predicts that 4, 5, 6 STD deviation moves should hardly ever happen. Therefore logically 7% ie 6 std deviation...

After further research Looks like it's part of book 4 chapter 1. Now just need to know the explanation for choice being C Please

Does anyone know if this is a part 1 or part 2 objective ? Compare the normal distribution with the typical distribution of returns of risky financial assets such as equities There was a sample question from GARP through email as below but not sure I've seen this objective in PART 1 books. if...

Thanks @David Harper CFA FRM that's a relief and makes a lot of sense now.

Hi P1 Book3 Chapter 14 Page 176 says "Under any model, the price of a call option is always a convex function of the Strike Price" and then it shows Figure 14.6 where as the Strike price increases (X Axis), the call price increases (Y Axis). It would make sense if It's a convex function of the...

@David Harper CFA FRM I know you said you'd review later but this is already incredibly helpful. The sentence unchanged term structure after a year or so is what was missing in the content, I think. Even then I may have still needed some examples to understand better. With your examples and the...

Hi, In Part 1 Valuation and Risk Models under 10.4 GARP material states the following. Does this apply only to Forward Rates, as usually Interest Rate (Presumably Spot Rates) and Bond prices are negatively correlated (ie if Interest rate > Coupon rate of the bond, then Bond price falls). The...

thanks @David Harper CFA FRM for your quick response. This really helps.

Hi, The following is an excerpt from 2020 FRM Level 1 Valuation and Risk Models Chapter 1 Measures of Financial Risks. Can someone explain if there is a formula that can be used to calculate VaR for a given confidence level when there is a range of possible equally likely outcomes (Note: the...