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Hi Nicole, more than happy that Brian and I have been rewarded for our contributions to the forum. I would like to go for the $15 Amazon gift card (Nicole, I guess you have my e-mail address anyway). Many thanks!

straightforward answer: yes, of course it is highly relevant and there is by far no other professional exam out there which offers continuously updated readings tailored to industry standards/requirements. It's superfluous even asking this kind of question. I would even say that anyone who works...

Pleasure!

First of all it is key that you a get a solid footing in statistics and quantitative concepts using (among others) one of the following books (authors in brackets): 1. Statistics and Data Analysis for Financial Engineering (Ruppert) and Statistics and Finance (Ruppert) 2. Mathematics and...

Hi All, I would like to add a couple of bullet points to the theory about the Information Ratio (IR) for a better understanding. 1.) In certain cases (in certain articles) alpha is defined as 'Tracking difference' which is the simple difference between the return generated by the manager and...

Hi All, I wanted to raise the following topic and share my insights about Cash-funded vs. syntethic CDO and whether one of these requires the borrower notification/obtaining borrower consent? This could be of one of these tricky questions in the exam (similarly engineered questions have turned...

Hi David, as promised I want to clarify a few things here. First of all you don't mention that the Annualization Factor is calculated using the attached (copied) formula; to be precise the so called Annualization Factor involves the square root. Hence as in your post would be 3.16%, 3.79% and...

Excellent reply! I will add another couple of points over the next few days.

Hi All, I just wanted to share an important topic which is unfortunately completely neglected in the GARP curriculum. Under the assumptions of i.i.d we know that the following properties apply to the scaling of mean and variance (volatility) - I am referring to C. Alexander 'Market Risk...

I am not sure about the CLN myself, I devoted quite a while to this one during the exam. Following the CAIA curriculum I have my doubts that the CLN answer with the collateral is correct (even if I chose it in the end). What's for sure: TRS is wrong.

the Total Return Swap answer was for sure nonsense as they mixed up the appreciation/depreciation of buyer/seller. I chose the answer with the Credit-Linked Note.

Enjoy, well deserved!

It was a rough example. I was simply differentiating between idiosyncratic vs. business risk and not talking about any subsets of risks. Business risk is an overarching (all encompassing) term and it can be every sort of risk when the business starts it's operation on day 1.

I am citing C. Diderich 'Positive Alpha Generation' (Wiley) here where he mentions the following with respect to idiosyncratic risk. Idiosyncratic (diversifiable, non-market) risk: the risk specific to asset 'a'. Emphasis mine: The CEO of Coca Cola falls under a bus and dies. This will have...