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Its all one and the same. F- max (F-V, 0) is payoff at time of debt maturity. Present value = F*exp(-rt) - value of put option

Apologies,...I made a mistake with the payoff to senior debtholders. Should be -> F- max (F-V, 0) The equation as such simply talks about the payoff received by senior debt holders and the fact that : They max payoff they receive is par (when firm value (V) is greater than par value (F)) The min...

Hi, F - Senior Debt face value V - Value of firm at time of debt maturity The payoff to the senior debt holders at the time of debt maturity = V - max (K-V, 0) The highlighted part matches the payoff from a put option. The present value of a senior debt holders position can be seen as a...

Hi, Further to the note from Alex,......this formula is normally employed when the question provides you with the future firm / asset value as opposed to the current firm / asset value (which employs BSM to arrive at DD). Thank you

Hi David, Please ignore this query. Just found a link wherein you have already identified this as being a problem. https://forum.bionicturtle.com/threads/frm-handbook-example-23-9-frm-exam-2008-q-3-31.4747/ Thank you

Hi David, Query 2 with respect to the Credit Risk focus review video. I have attached a screenshot of the question. Please let me know if you are not able to view the s/shot on this or my earlier question and I will type it out. This question tests us on the allocation of prepaid principal b/w...

Thank you David,....I just hope that such questions do not turn up on the actual exam.

Hi David, Apologies,.....I am just going through the focus review videos & am struggling with a few of the questions. Query 1 is with respect to a simple illustration of the"Total Return Swap". I have attached a screenshot of the question. There is a line in the problem which states that...

Hi David, Need your guidance with regards to the below question from the end of GARPs Market Risk book. Consider IO/PO strips based on original pass through MBS whose effective duration is 5 years. If the PO tranche has an effective duration of 20 years, what would most likely be the effective...

Hi David, The below question is directly from GARPs Credit Risk text book and the answer has been highlighted. Question - An investor has sold default protection on the most senior tranche of a CDO. If the default correlation between assets held in the CDO decreases sharply, assuming...

Hi David, I have a very basic question with regards to securitization,....need your help pls. I am trying to understand the monetary benefits of securitization from the context of the "Originator". I understand some of the angles in terms of banks being able to monetize assets (eg loans) //...

Thank you David !!!

Hi David, Could you help me with the query posted in the below thread please. https://forum.bionicturtle.com/threads/p2-t7-303-liquidity-and-leverage-malz.6863/ Thank you, Roshan

Hi David, Need your help please on one of the AIMS under Liquidity and Leverage (Malz) - "Calculate the LVAR for a position to be liquidated over a number of trading days". There is a formula in there which I think I understand, but need to just double check with you. Could you please...

Hi David, I wasn't able to find any questions on "Liquidity and Leverage (Malz)" under the Operational Risk Management module of the study planner. Just noticed that that this forum thread has a few questions on this chapter. Are there any more questions for this chapter please ? Thank you

Hi David, This would be really helpful. From my perspective, I can still do without your study notes by referring to GARP's main material. I however find it very hard to sign off on a chapter without going through your question bank. Thank you, Roshan

Hi David, I do not see the question banks for - Portfolio Construction (Grinold) Risk Monitoring and Performance Measurement Performing Due Diligence on Specific Fund Managers Hedge Funds These chapters are not on the Global Topic Drill Question Bank as well. Could we expect to see question...

Hello, I've worked out the problem in the attached file. Hope this helps.

Hi BT Team, The excel workbook pertaining to Portfolio Risk: Analytical Methods is not on the study planner. Please provide us with this workbook. Thank you

Thank you David,......this estimate really helps and I will prioritise the Basel Readings accordingly.