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Come on Dave! This is a huge success. You need to start a CFA program.

Definitely great work David. I guess i have to come back here next year (not a pleasant feeling...preparing again) but i guess you got to do somethings to pass a test.

No as i said, i am expecting around the half of 100 (read the word frustration). Those numbers were just what i put forward, what do you think the average should be and lets play that game.

I guess that sort of sums it. 1)It wasn't at all very diverse. Lots of stuff were repeated while many many weren't tested. 2)There were dumb stuff about Basel (I call it dumb because, instead of asking to remember memorized stuff (not formula application..just plain facts), it would have...

usually what are the max, min, average (like 80, 120 and 95 or something like that) in terms of cut off marks out of 140? Is this year just in the same range as last 5 years or better or worst?

David: What do you mean by, as they draw from 2006? I did not get that part. Is it just 06-08 questions that are in practice exams (i mean the level of difficulty) or do you mean something else?

David few more questions: a) Practice exams(the 3 by garp for 08) this year are more wordy and less quantitative (more comparisons/qualitative) sort of? b) Are practice exams tougher/ easier or about the same as the real deal? c) Is it always 70 + 70 questions or it varies? Just curios...

I dont get this at all! I mean how do we know the duration is 7 anyway? The bond is at par can be assumed but there is no yield or coupon info. Is there a way to back out yield from yield vol? Am i missing something?

Johannes, 1)I dont remember Hull and no time to read 48/49 pages 2)I think i was right and stand by it for the case of selling bronze. 3) There are conventions with contracts. I am not sure if that is relevant here. But lets say buying a future contract in oil might mean delivering oil...

typo: After harvest, there are other factors that set in, is there sufficient demand, where to store the stuff age old crap. So prices normalize (or fall). Not fall. PRICES NORMALIZE OR INCREASE BACK AFTER SHARP FALL.

Yes, i don't know about exam questions but there are tons of articles clarifying what alpha means and most of it is to show "ALPHA IS THE RETURN OVER AND ABOVE THE MARKET" thats how they sell their alpha to clients and get investment. However, again, exam trick could be to assume a benchmark...

Sorry i might have interchanged(screwed up!), i am sure Long CDS is i am buying the CDS to protect myself against default. So i guess i confused the whole thing. I apologize.

Come on, screw hull! See the common sense here. You are going to sell the underlying in 3 months. Are you going to sell futures as well to hedge it?????? Hedge of a call option is going short the stock. Hedge of a short call option is to buy and hold stock. I guess you are just getting hung...

Here is what i would think about it: Main decision lever is harvest and decision point at harvest or just before harvest. So right before harvest, a "wow" (positive supply shock sort of) hence prices fall in near term. After harvest, there are other factors that set in, is there sufficient...

Explanatory power (usually is R-sq) for the regression examples. May mean something else in models. R2, adj R2, or any other measure. Unwinding is taking negative position. CDS unwinding for e.g. is to sell it at maturity (if default hasn't occurred) and similiarly for bonds rolling over...

Optimal Hedge Ratio = h* = rho*Sigma(S)/Sigma(F) hence h* = (0.77)*(2.6%)/(3.2%). I am sure the 0.77 can never be in %. So h* = 0.6256 N* = - h* NA/Qf = - (0.6256) * (-1000mt)/ 25mt He is selling 1000 mt in 3 months time and needs to hedge that with futures (contract size of which is 25mt)...

There is US treasury and Malaysian Ringgit involved here. So both credit (default) and currency risk. Hence Going Long Corp bond gives him a position where he needs to hedge both currency (which he does by buying UST so that is pure risk free (atleast in theory)) and he goes short USD CDS of the...

I concur! with Suk n David. It surely has to do something with the word "Net Positive or Net Negative" Beta. Because it is widely known factor among funds n fofs that beta eats into alpha. Mathematically also, if beta is negative (market is negatively correlated to portfolio) then alpha will...

The 0.25 is a basis point change and hence 0.01 * 1mn = 10,000 So, 10K*[100 -0.25(100-EDFquote)] 4.52 because that is the proceeds for optimal hedge. Normal hedge would take into account 5mn which will lead to more negative position hence loss. Delta N = Delta S * Ns - Delta F * Nf * Optimal...

Thanks David. Appreciate it. I dont get the question clearly either.