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Learning Objectives: Identify the participants and describe the use of collateralization in the derivatives market. Define the International Swaps and Derivatives Association (ISDA) Master Agreement, the risk-mitigating features it provides, and the default events it covers. • Describe the...

Learning Objectives: Define derivatives and explain how derivative transactions create counterparty credit risk. Compare and contrast exchange-traded derivatives and over-the-counter (OTC) derivatives, and discuss the features of their markets. Describe the process of clearing a derivative...

Learning Objectives: Define CDS forwards and CDS options. Describe the process of valuing a synthetic CDO using the spread payments approach and the Gaussian copula model of time to default approach. Define the two measures of implied correlation: compound (tranche) correlation and base...

Learning Objectives: Describe a credit derivative, credit default swap (CDS), total return swap, and collateralized debt obligation (CDO). Explain how to account for credit risk exposure in valuing a CDS. Identify the default probabilities used to value a CDS. Evaluate the use of credit indices...

Learning Objectives: Describe the significance of estimating default correlation for credit portfolios and distinguish between reduced form and structural default correlation models. Describe the Gaussian copula model for time to default and calculate the probability of default using the...

@DPoon9496 I just checked with customer support, and they said that they responded to your email. Can you confirm that you received their response? The support team usually answers in a very timely manner. We are not able to provide support for account issues here in the forum, so you took the...

Learning Objectives: Assess the credit risks of derivatives. Define credit valuation adjustment (CVA) and debt valuation adjustment (DVA). Calculate the probability of default using credit spreads. Describe, compare, and contrast various credit risk mitigants and their role in credit analysis...

We hope that everyone did well on the FRM Part 2 exam! We would love to hear your feedback about your exam experience. How did it go? Did you encounter unexpected questions? Which topics were tested? Did you find it difficult? Please also fill out the poll at the top of this post. We...

We hope that everyone did well on the FRM Part 1 exam! We would love to hear your feedback about your exam experience. How did it go? Did you encounter unexpected questions? Which topics were tested? Did you find it difficult? Please also fill out the poll at the top of this post. We...

As many of you know, it is important for us to understand our customers, their requirements, and how they are utilizing our study materials. One way we can gather information on this is by keeping track of which exam date our members are registered for. Please take a moment to fill out our poll...

@Dominik Hosefelder Thank you for your feedback! We are working to improve the platform each day and will continue to make improvements until the platform provides the most user-friendly and efficient features for our members. If there are specific PQs that you find are not displayed correctly...

Learning Objectives: Compute and evaluate one or two iterations of interim cashflows in a three-tiered securitization structure. Describe the treatment of excess spread in a securitization structure and estimate the value of the overcollateralization account at the end of each year. Explain the...

Learning Objectives: Explain the capital adequacy, asset quality, management, earnings, and liquidity (CAMEL) system used for evaluating the financial condition of a bank. Describe quantitative measurements and factors of credit risk, including probability of default, loss given default...

Learning Objectives: Describe the application of the Vasicek model to estimate capital requirements under the Basel II internal-ratings-based (IRB) approach. Interpret the Vasicek’s model, Credit Risk Plus (CreditRisk+) model, and the CreditMetrics ways of estimating the probability distribution...

Learning Objectives: Compare market risk value at risk (VaR) with credit VaR in terms of definition, time horizon, and tools for measuring them. Define and calculate credit VaR. Describe the use of rating transition matrices for calculating credit VaR. Questions: 24.17.1. Warren Bank is...

@Meta Yes, you are correct. GARP's policy for passing the Part 2 exam after passing Part 1 is as follows: "Pass the FRM Exam Part II by December 31 of the fourth year of passing the FRM Part I." So, the last exam you would be able to take is November 2025, as no FRM exam is administered in...

@jnrngzhng This has been fixed. Thank you.

@jnrngzhng It looks like I did forget to post P2.T6.24.6 here in the free section of the forum; however, the PQs are posted in our paid materials and in the paid section of the forum here...

@sophieshil There are currently no issues with Vital Source, so it sounds like this is an issue with your specific eBook code. If you contacted support after 5:00 p.m. ET on Friday, you will hear back from them today. Our office hours are M-F from 8:00 a.m. to 5:00 p.m. ET. Please let me know if...

Learning Objectives: Using the Merton model, calculate distance to default and default probability. Assess the quality of the default probabilities produced by the Merton model, the Moody’s KMV model, and the Kamakura model. Questions: 24.16.1. You are an analyst at a risk management firm...