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I have read this chapter twice now and it was a struggle! I really don't see much in this chapter that can be tested other than definitional items and, perhaps, a few directional questions asking about how one scenario might increase or decrease wrong-way risk. Anyone have any thoughts? Brian

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Conditional does NOT necessarily mean dependent!

Respectfully, I must disagree with this statement, "...whenever there are conditional probabilities b/w events are given it automatically means that events are not independent." You can have conditional probabilities with independent events. For example, let's assume we are given the following...

Thank you! Please send me an email with the Amazon code. Brian

The approach I used is pretty standard (for this type of question). I might add that this is definitely an exam-type question. Brian

Let A = Male, B = Accounting Major Then, P(A) = P(Male) = 300/500 = 0.600 P(A and B) = P(Male and Acct) = 100/500 = 0.200 P(B) = P(Acct) = 160/500 = 0.320 P(A and B)/P(B) = 0.20 / 0.32 = 0.625 and we know P(A) = 0.600. Since P(A) not equal to P(A|B) = P(AB)/P(B), A and B are not independent...

Let's all take it easy! I understand both points of view. On the one hand, many of us are receiving alerts when new posts are added to the forum, so we are excited when we receive the alerts for a new topic or response. When we realize that the question has been asked and answered countless...

GARP provided practice exams can be found here: http://www.garp.org/frm/study-center/practice-exams.aspx If you have other practice exams, please share them with us if you are willing to do so. Best, Brian

I suppose the t statistics are being used since population variance is unknown..... At the end of the day, I believe one can use either Z or t statistics when the population is normal and it shouldn't make a difference but I am unsure of this. I also believe it is the case that critical t...

I am pretty sure that you can use the Z when the population is normal - or at least, that is why I would justify the use of Z here.

It is hard to decide - based on my background, Topics 3 and 4 were so much more difficult than Topics 1 and 2, so they took significantly more time to understand (and much of it is gone now since I don't use it everyday! This is a big concern of mine with respect to Part 2, i.e., how much of...

My recommendation is based on the assumption that you need to work (like most of us). If you don't need to work, then go ahead and quit! (Why are you working in the first place?) :)

Jayanthi, There is so much material to cover, I would stick to the assigned readings. You can always study the Gujarati afterwards if you'd like to. By the way, have you begun studying Topic 3 or 4 yet? Topics 1 and 2 are nothing compared to Topics 3 and 4 in terms on content, so I would move...

The fact of the matter is that most of us have to find time to work and study. If you cannot do so, then it suggests to me that it is not a high enough priority. (I am sorry if that sounds harsh.) I would never recommend quitting a job to study - there is no guarantee that you will be able to...

I am so jealous! I need to take my Part II on May and I am so envious of all of you that have been receiving your certifications recently! Congrats to you all!

Culp states that if a protection purchaser owns the reference asset, then he is in a better position with a cash settled CDS rather than a physically settled CDS. Please let me know if my thoughts below are correct. Let's assume a market participant purchases a bond at par. Later, the issuer...

It is often suggested that, ceteris paribus, higher correlation favors equity over debt and lower correlation favors debt over equity. It is interesting, then, that the illustration Malz provides on page 324 shows the highest equity return occurs with a 0.00 correlation scenario and decreases...

From my perspective, I found the Financial Markets and Products the most difficult area given the amount of information and my limited experience with non-fixed income products. Brian

While I agree with Shakti here, (and you will soon find that he is virtually always right,) I would also remind you that GARP provides weightings. For example, for Part I, Foundations is 20%, Quantitative Analysis is 20%, Financial Market and Products is 30%, and Valuation and Risk Models is...