Search results

Hi David, acebhavik, So I understand that in the exam, I should consider call value = equity value. Please advise.

hmm...

I might be missing something because I'm mentally little tired and haven't taken a break since long time, but this is how I see it: In question, it's assuming that c=equity In question 2, c is already given, if c=equity, then no need to calculate, the answer which is c is already given.

Apologies for the misstated formula. Let me write it again: In question 1: -This is given: V for value of firm, F for face value of debt, S for value of equity (S is not Spot price anymore as it was in FRM1); and also r for risk free rate -Asking for value of p -Answer provided: p = S +...

Hi, In FRM1, it was S+c = Ke + p In FRM2, I found 2 practice questions: -In first question, the question gives the V for Value of firm, F for Face value debt, S for value of equity and then asking for p. In the provided answer, the c is substituted with value of equity and p is calculated...

Thanks Shakti, I'll go through them.

Hi, I reviewed few practice questions and I can see the logic mentioned by you, Shakti. In another matter, in the practice questions, it seems that they differentiate between VaR (Normal Distribution) and VaR (Arithmetic Returns). However, I don't really understand the concept but I don't see...

Hi David, I found 2 practice questions related to lookback options in which only in one of them, it's not mentioned whether it's floating or fixed. However, the answer provided to the 2 practice questions is consistent with the logic you mentioned in your post. Hence I'll be following the...

Hi David, thanks and sorry for the late reply. So I have to practice old FRM sample questions to get used to Hull understanding and not to search on the net because other authors might have different opinion. It's an issue of having standard terminology in finance. Thanks again David,

I have a practice question about a lookback call in which it's asking to calculate the difference in payoff between fixed and float; in another practice question, it's asking to calculate the payoff for a lookback put without specifying whether it's a fixed or float. In the put question, how...

Hi Shakti, Sorry for the late reply. Yeah, now I understand the mechanism for when to add and when to deduct. Ate same time, now, it raises more questions about the concept of VaR itself which I will ask when I review the questions again. Thanks again Shakti,

When it's mentioned in the question that the Mean P/L is 10%, then what the question actually is saying is that the mean loss is 10%? and is that why it's included as negative amount in the equation?

Thanks a lot David, I passed part 1 too. Your explanations were really helpful specially in topics which were overlapping/inconsistent/confusing. Score: 1, 2, 1, 2 Already started studying for part 2. Thanks again @David and @Suzzane

Hi Noalv, I was planning to do the same. I think part 2 paper will not be marked before passing part1. So if you pass in part 1 may or nov. then they let you know whether you passed part 2 nov. regards.

Thanks, so it's a product issue not AIMs.

On Kaplan Website, the available materials for either part 1 or 2 are labeled as study materials of 2013 May. Does that mean that the May and Nov AIMs and study materials are not the same?

How about the various formulas for variance [e.g. Var(2x+3y)=...] ? or the one that are not equations but we might needed such as max/min boundaries for the value of European/american options ? Are the above provided in the exam too?

Agreed, thanks Shakti,

Hi Shakti, It's not mentioned in the question whether the profit is withdrawn or not, thanks.

There is a "Past FRM Exam Question" in Kaplan book 3 > End of the book Past FRM Exam Questions > Question No. 2 which assumes that the profit is not withdrawn. Is the solution in Kaplan book provided by GARP too or solved by Kaplan? Unfortunately it was the only example I could find for this...