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Yep, results out. Barmy. Couldn't have done it without BT, but I did it only with BT materials...I honestly believe they are sufficient (and superior) if used properly. Scored (1,1,1,1,1) for my second clean sweep. :) Well done to the other candidates who passed and commiserations for those...

Hi, The source material (with the exception of a few free texts) is available from the GARP website - you will need to purchase these separately if you want them. Personally I never bothered but I did purchase a few key texts e.g. Hull, Tuckman and Jorian (VaR). As long as you do the...

Hi MJ2013, Buying protection through a CDS is not buying an option...it's 'like' buying insurance - but they are not the same as you don't necessarily need to have an insurable interest. In other words, you can buy protection on a company/sovereign whose bonds you don't own and so profit if...

Straw poll results: Which way around do you view ‘long’ and ‘short’ CDS? Method 1 Consistent with the bond world (and Wikipedia, if that means anything) Long CDS is to sell protection i.e. be long the credit quality of the reference entity Short CDS is to buy protection i.e. be short the...

HI David, Yes, there was one direct question along the following lines where it mattered explicitly: Position; Rating Before; Rating After Long CDS; XXX; XXX Short CDS; XXX; XXX Long Bond; XXX; XXX Q: Which scenario of ratings causes biggest decrease in credit quality? And two separate...

Well, I counted at least 3 questions in the P2 on Saturday that referred to either 'long' or 'short' CDS. I chose to follow David's view and take long CDS to mean buy protection, i.e. short the credit. I'm very glad I asked this questionn now and got clarification prior to the exam otherwise my...

Great - thanks David. It's good to know that you know about the discrepancy! I got a difference in the magnitude of ~15 bps when I tried to reconcile between the formulae. Whilst it is fun to note these things in general, two days before an exam, it does slow you down as you are constantly...

Hi David, Hate to ask at this late stage but the above doesn't seem to tie to Malz? You say: "1+Rf = (1+y)*(1-PD) + (1+y)*PD*r ...., and we can solve for y = (1+Rf)/[1 - PD*LGD] - 1" Malz has: 1 + r = (1 - π) * (1 + y) + πR giving: y = (1 + r - πR) / (1 - π) - 1 the two do not...

Seconded. I have to admit I find the solution to Q8 in the 2013 P2 exam confusing...given the information supplied in the question my first inclination was to use Stulz's formula: z = spread = - \frac{1}{T} \ln (\frac{D_{mv}}{F}) - r which is derived simply from D_{mv} = F e^{-(r+z)T}...

Good work! Now to put them into MathJax?! ;)

Hah - no problem. I've heard both used commonly...there are some people who swear by calling everything in bond terms so they would agree with wiki. I'll do a strawpoll on Monday when I'm back in the office... I just find it easier to talk in terms of protection....oh, and, you could always...

Hi goal2013, You might have to be a bit more precise about point 3 at the least...and probably points 1 and 2 as well. Try and make it as easy as possible for others to answer your questions (i.e. repost it or link to it) - if people have trawl PDFs to find it, they probably won't...though...

Pedantry (and probably unimportant at that, imagine/hope the exam will be clear) but just so you're aware...wikipedia disagrees with your long/short CDS definition... BT says: "as you know "short the CDS" is to sell credit protection, which is synthetically long the reference" But wikipedia...

Phew....thought I'd lost the plot for a moment

Thank you David - and thanks for the T9 notes...they look good and having already been through the T9 PDFs they provide a nice AIM map on which I've now made some (2 A4 side per PDF reading) terse exam notes. Thanks again!

Thank you for the reply Suzanne and sorry if I'm being a bit thick but looking at the new Tuckman PDF it's just an amalgamation of the prior Tuckman Qs (excluding the no longer assigned content on fixed income and MBS) along with the upgrading. There are no new questions as far as I can see...

All, Just a note to those taking the May 2013 exam in London - at Heathrow Terminal 5 (!). Yes, that's right, GARP have scheduled the exam at the busiest airport in London (well, I say IN London...it's actually miles outside and takes forever to get to) - bring earplugs. The tube is down...

Hi Suzanne/David, A quick question, (which may entirely relate to my own deficiencies) but I notice there is a 'new' GTD for P2.T5 (Market Risk)...or at least, it's new to me. Is this an updated version of an old document that I've missed or is it an entirely new PDF? If it's a new PDF then...

But just to clarify this Mish - the questions themselves will not be new - so don't get stressed. :) Only new questions for T6 on the go are the Malz questions, as far as I am aware.

Hi Matt, I'll try and be brief and hopefully it will help you out... Being long convexity in a bond sense means that when rates rise (fall) a long vanilla bond holder loses less (gains more) than predicted by duration alone. This is because, loosely speaking, duration is simply a linear...