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I feel that background is essential in the amount of preparation time. I've read only 20% of the level 1 and 40% of the level 2 material and passed both parts. Without my math background and CFA education this would have been impossible. I also see a difference between CFA exams where you had to...

J12 is volatility squared, so 5%^2=0.0025, and J13 is 12%^2=0.0144. J12, and I13 are zero because the correlation is 0. Is indeed the same as E12.

Oh, you mean it that way. Sorry :)

2. to calculate the BVA.

@Turner: EPE * counterparty's credit spread and subtract ENE * own spread

Two questions about smiles. The one I couldn't solve: implied volatility is determined for an equity option with K=30. This vol is used to value some options. Which option is undervalued while using this vol? a. out of money call, in the money put, at the money put, in the money call. One...

In a normal case, the acquirer will pay a premium for the target. So when the announcement is made, the stock price of the target goes up and of the acquirer down. So suppose in this case, before the merger was announced, the price for GV is 15 and 60 for LM. After the announcement the price for...