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@SunnyAmazon your logic is good! :) Please notice the question asks for the nearest ... let's see, your answer appears to be almost exactly accurate while the correct choice is rounded and only, um, 0.021% away. Pretty close, I'd say!

@SunnyAmazon on financial exams, the corporate tax rate is almost always just given as assumption. Older questions often assume 35.0% while our recent questions assume 21.0%; see https://en.wikipedia.org/wiki/Corporate_tax_in_the_United_States. Although there is a meaningful difference between...

Hi @elena77 I don't know why your approach is correct to the solution, it may be coincidence (and please note I can't prioritize permutations on Hull's EOC ... ). If you want to apply the "as if" two bonds approach, which you are attempting to do, then the correct approach is simpler than you...

@nitin3000 this question has been analyzed in the (paid member) thread at https://forum.bionicturtle.com/threads/garp-2016-p2-19.10335/ where I commented:

@nitin3000 this question has been analyzed in (paid member) the discussion thread at https://forum.bionicturtle.com/threads/garp-2016-question-15-garp16-p2-15.10005/ i.e., @Siqueue wrote and I replied,

@Jash What Nicole said. And, I would like to repeat for any future readers of this thread: I've just scanned a competitor's product and, frankly, I'm not very impressed. We care about the quality (including accuracy) and depth of our work. Although we can influence, we cannot control how much...

@luckydog this video about the risk typology is one of the more fundamental concepts in Part 1. It is not time sensitive and not even out of date :rolleyes:

Hi Daniel (@onil100 ) Thank you for your purchase! The question has been asked/answer, and I will let @Nicole Seaman refer to relevant prior thread(s) when she returns to the forum. I will also take a re-look at the Quant, but in general our embedded questions especially include some additional...

Hi @Jose V I don't know yet. As of this/next week, I've just finished writing Practice Question sets for the new T8, so that along the way I've generated the raw XLS. Then I have to go back and organize them and make them a bit more user friendly. But we have higher content priorities at the...

Hi @kellychi In the interest of saving time, I moved your question to this thread so that you can view my youtube video above (please see that above T4-25: Fixed Income: Infer discount factors, spot, forwards and par rates from swap rate curve) where I've tried to succinctly explain swap versus...

Boom! congrats @Sixcarbs don't even think about leaving us now! We were there for you during the salad days ;)

Hi @wooju7533 1. "conditional" distribution does not necessarily mean conditional normal distribution: the conditional distribution could be any distribution. We could assume a heavy-tailed conditional distribution. But the normal GARCH(1,1) is our classic example of a model that happens to...

But @amit.m.sharma I agree with you that's not what the question had in mind, but if the weights are flexible then I find the MVP to be at weight(A) = 2/3, weight(B) = 1/3, ρ(A,B) = -1.0 with variance and standard deviation equal to zero (not 10%).

HI @leenaabbasali I don't think you can because (i) the above assume continuous compound frequency and (ii) the spot rate curve is not flat. If, on the other hand, we were to assume a flat spot rate curve at 6.50% per annum with semi-annual compounding, then we could solve for the present value...

@DShim27 it would save time if, when you have a question like this, you do a quick search on "information ratio." Very searchable question. (it even has a tag: https://forum.bionicturtle.com/tags/information-ratio-2/). I recently wrote about a correction to GARP's material here at...

Hi @wooju7533 In 505.2., you are correct about the 101.60 but that is the value three months (+0.25 years) in the future; it is a future value (FV), not a present value (PV). Please note the assumption (emphasis mine): "Three months ago, a US corporation issued a floating-rate note (FRN) that...

HI @wooju7533 In 505.1, there are 180 days between coupons (ie, between 4/1 and 10/1), the coupon rate is 9.0% per annum payable semi-annually (this is typical! So that's 4.5% or $4.50 on 4/1 and then another $4.50 on 10/1). On the settlement date of 9/1, we need to subtract the accrued interest...

Hi @sunithamenon An option contract is for 100 options (i.e., a contract to buy or sell 100 shares). It's one of those contract assumptions that we sometimes take for granted and maybe should be re-articulated each time. The FRM does assume you will know this; there have been questions that...

Yes @DShim27 that's always true!

I agree with @amit.m.sharma portfolio volatility here ranges from sqrt[0.50^2*0.20^2 + 0.50^2*0.40^2 + 2*0.50*0.50*0.20*0.40*(-1.0)] = 10.0% sqrt[0.50^2*0.20^2 + 0.50^2*0.40^2 + 2*0.50*0.50*0.20*0.40*(+1.0)] = 30.0%