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Hi @David Harper CFA FRM CIPM, Thank you for the clarification and the help! David , just one out of the syllabus question, now a days in a real life, does brokers or analyst use the binomial tree and after the disaster of LTCM does Black-scholes merton model still used? Is there any else option...

Hi @David Harper CFA FRM CIPM, Please explain the question. Question is from back of the book. Mark, a risk manager for bank XYZ, is considering writing a 6 month american put option on a non-dividend paying stock ABC. The current price is USD 50, and the strike price of the option is USD 52...

Hi @Jayanthi Sankaran, yea sure it will br great, but if you look the practice question set once there is also a question like this, David mentioned there that we need to calculate the p and 1-p. But it will be great if David explain this. I will tag him in the post. Sorry for the trouble. Thank you

Hi @Jayanthi Sankaran, this type of questions are for confuse us. Even if you got official books you can look for explanation. We still need yo calculate the P and 1-p separately. Thank you,

Hi @Kangaroo79, Your IR formula is correct. But second formula which is t-statistic formula, it is the formula for hypothesis tests of whether coefficient alpha equals a prespecified value, hypothesis tests involving two statistically independent sample alphas as may arise when testing the...

Hi @Jayanthi Sankaran, Thank you for your reply, I think you should try to solve the question one more time, because whether it is american or european option we need to calculate P and 1-P. So you need to calculate the like e^-12%*0.25($4*42.39)=1.65(call option second node). And then...

Hi @Jayanthi Sankaran just a one question for you, look if you can explain me or otherwise I will ask David! Question is form GARP's book: Mark, a risk manager for bank XYZ, is considering writing a 6 month american put option on a non-dividend paying stock ABC. The current price is USD 50, and...

Hi @Nicole Manley, I will tag you so. Thanks for all the help:)

Thank you so much @Jayanthi Sankaran, will remember it. Thanks a lot:).

Hi @Jayanthi Sankaran thank you for the clarification. Just one quick question, is it same applicable for American call option? Thank you

Thank you @Nicole Manley, will post my query there. In the mean time will you tell me how to delete a thread that I have added as new? Thank you:)

Hi @David Harper CFA FRM CIPM In question set R30.P1.T4.Hull question no.1.4(page 4) there is question like follows: And there is also explanation of this question on page page 7 as follows: But I think there is something missing there, when I calculated the prices as follows: 1st...

Hi @Nicole Manley, Thank you for the clarification:)

Hi @David Harper CFA FRM CIPM, In 2012 practice exam P1.M1. (explanation on page no.17) there is question on GARCH(1,1) model question like follows: I think that the estimate of today's volatility should be 2.910326% not the 3.47851% as explained above correct me if I am wrong. Thank you:)

@David Harper CFA FRM CIPM, Thank so much. That's helps a lot

Hi @Jayanthi Sankaran, Thank you very much. Just wanted to ask lasr question when we compute z values are we going to add them together to get the probability? Thank you very much

Hi @Jayanthi Sankaran, the anwer is correct, but I have just one query that is if there is negative value that is if there is -2 and -1.5(negative) then how will we calculate or use the z lookup for negative values. Appreciate your help. Thank you

Hi @David Harper CFA FRM CIPM, the question from Garp sample exam question (behind the book) Assume that a random variable follows a normal distribution with mean of 80 and standard deviation of 24. What percentage of this distribution is not between 32 and 116? A. 4.56% B.8.96% C.13.36%...

Thanks @Nicole Manley really appreciate it:)

Hi David, Got little confused in P1.T4. Valuation & Risk Models Gerhard Schroeck, Risk Management and Value Creation in Financial Institutions in page no. 6 there is calculation of unexpected loss. Like below in the equation we are taking the square that is the variance of the LR and then...