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Thanks David, So in the exam, for the equivalent rate questions, I should ignore any details provided regarding the frequency of interest payout because it's assumed that the interest is reinvested. In reality I guess such details should be documented.

The question was asking for the amount of interest, I changed it to equivalent rate according to the point wanted to raise. Actually, the only similarity now is the interest rate.

I was a paid member and downloaded pratice questions pdf files. Now I don't have access.

Hi again! I reviewed more practice questions and now I've even more questions! Assume the following deposits which are similar to BT practice question no. 157.3: Deposit no. 1: The bank quotes the interest rate on a $1,000 as 9.0% per annum with continuous compounding and the interest is...

I got to say I'm confused, I will go through more practice questions tomorrow and come back.

Thanks David for the clarification, I understand that how often the interest is paid is: a. not important when covering discrete to continuous and vice versa. b. important when calculating the PV of the bond. Is the above correct?

Thanks Shakti, When we say compounded monthly, are we assuming that the interest income is withdrawn each month too? Otherwise there will be two periods, one period specifying how often the rate is compounded and the second one for how often the interest is actually withdrawn and paid. My...

Assume the following: An asset is quoted at 12% annually with continuous rate. Interest is paid quarterly. Is this correct for equivalent rate with monthly compounding? r = 12 * [ e^(.12/12)) - 1] = 12.06% Does it matter whether interest is paid quarterly, monthly or annually? What about...

Thanks, I should review more recent practice questions to get used to the formula.

I read those previous posts regarding the same issue, any way what I'll do is to use whatever data provided in the question. However, it's an example of inconsistency and discrepancy from what should be defined as standards/principles(if there is/should be). How in practice the risk manager...

The formula used for calculating the information/sortino ratio in several practice questions is not consistent. Here are the formula used: Information Ratio: Formula 1 =Alpha / Tracking Error Formula 2 =[Return(portfolio) - Return(Benchmark)] / Tracking Error Formula 3 =Mean Returns / Tracking...

Thanks

For 90%, n=1000, is it the lowest 100(101)th return?

I don't understand the 50% in the third line, where is it coming from? However, what I understand is that usually the 5% is used in historical simulation and there will be no questions in FRM asking for 10%. I hope this is correct.

The question is related to topic 1(out of the 9 topics). I could find only one practice question in kaplan books for this particular type of question. The question provides the below data and asks for the daily VaR at 5% level of significance using the historical simulation method: Portfolio...

So it's not available on the BA plus calculator, somehow I'm just happy that it's not. I'll follow your recommendations dependent on the decimals needed. Thanks,

For calculating Gamma, the Pi(3.14) is needed for calculating N'(d1). The Pi or square like symbol is available on some calculators but I can't see it on BA ll Plus. Is it available at all on BA ll Plus? and which symbol is used?

Thanks Shakti, It's clear.

Hi David, My math skills are not that good, so I really don't know what you mean by FUNCTION in regard to that equation!! Any way I understand that for the equation: x = e^(r*t), to get the (r*t) => Ln(x)=r*t Thanks David,

Thanks a lot Shakti, really helpful.