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Hi @Jayanthi Sankaran, you just need to convert foeward rate which is continueose to discrete semi annual like(e^0.10/2-)1*2=0.10254=10.254%. I dont think that we need to know portfolio of forward for the exam purpose, but portfolio bond is testable. But I think david will elaborate more. Thank...

Hi @Shazam023, first term is used when the compound frequency is continuice and secon term when compound frequency is discret (annual, semi annual etc.) hope that helps. Thank you

Hi @Shazam023, e^2R=0.90506, you can solve it using LN , like 2R=LN(0.90506). as 2R=-0.09975. R=-0.09975/2=-0.04988=4.99%. Please ignore the signs. Hope that helps. Thank you:)!

Hi @DTu, when the future or forward prices are less than the spot prices then the future or forward curve exhibits backwardation. In the above example forward curve is in backwardation that mean future prices are less than spot prices(similarly spot prices are greater than the future prices)...

Hi @RaamZen, I am not 100% sure but, portfolio manager own the bond of $30 million, so need to hedge against decline of the price. Whenever you own the portfolio with shares or bonds you need to short the position because you are hedging downsides. I think this link will help you...

Hi @Nicole Manley, Thanks a lot. I will let you when I want it. Thank again:)!

Hi @Shazam023, I dont think I am right person to answer this (because I dont have much experience), but I will try, clearing house is for standardized contracts like future, that means there are less counter party risk or you can say less liquidity risk. If some customer fails to fulfill the...

Hi @Shazam023, Every clearing house has members, like customers needs to maintain a margin account with broker, every member need to maintain margin account with clearing house. As same every broker needs to maintain the margin account with clearing house member. When there are liquidity...

Hi @Yuchao, you are right! In the explanation @David Harper CFA FRM CIPM, assumes the settlement year 2015.

Hi @Tania Pereira, Put it simply, first you need to discount the $1000 with 5% for 9 year (find the PV for the $1000), then daily yield volatility is 70 basis point(0.70%=0.0070), 99% one tailed deviate is 2.33 and finally it is duration based VAR so 9 years, all these together you will find out...

Hi @Jayanthi Sankaran, just want to correct you the perpetuity which is paid semi annually is $500 as I can see you have calculated perpetuity with $1000, read the question and try again solving. Hope that helps. Thank you

Hi @David Harper CFA FRM CIPM, just thing about adjusted R^2, We can also derive the Adjusted R^2=1−(1−R^2) N −1/N −k −1. In our practice exam I found some question that had R^2 and asked for adjusted R^2. We can use this formula for that also. Correct me if I am wrong. And what do you think...

Hi @Shazam023, Customarily, the degree to which two or more predictors (independent or X variables) are related to the dependent (Y) variable is expressed in the correlation coefficient R, which is the square root of R-square. In multiple regression, Rcan assume values between 0 and 1. To...

Hi @Jayanthi Sankaran, Thank you so much:)! Got stucked with that one. Thanks a lot:).

Hi @David Harper CFA FRM CIPM, Please explain the belows question: Suppose you observe a 1 year (zero-coupon) treasury security trading at a yield to maturity of 5% (price of 95.2381% of par). You also observe a 2 year T note with a 6% coupon trading at yield to maturity 5.5% (price of...

Hi @David Harper CFA FRM CIPM, I have some queries related to the exam. Can I change my answer on the exam? On the exam how do we suppose to do calculations that are need some plain/rough paper? Thank you for all the help:).

Thank you so much @Nicole Manley

Hi @Nicole Manley, thank you so much! by the way you stole my idea of upgrade and new package;)! just kidding, just one thing how many days it will be valid. Thank you so much again:)

Hi @Jayanthi Sankaran, the formula of Modified duration=Macaulay Duration/(1+y/k). In this case the k=number of compounding per year. Thank you:)

Hi @Jayanthi Sankaran, Thank you for great clarification:)!