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Hi, I know this is an old thread but my colleague and I were just discussing this. A short option with late delivery and physical settlement clearly has counterparty credit risk, do you agree? If the counterparty exercises, we will be exposed to the underlying which might carry CCR. Another...

Passed 11111. In hindsight, I studied too much for either of the exams... Anyway: Thanks a lot, David + Nicole! I will definitely recommend your service to my current and future colleagues.

Sorry for my poor choice of words (this is not my native language). This was in no way meant as a criticism towards you. Like in the specific example at hand what I was referring to were the - probably few in number, but very large in consuming my time - cases where there is simply not enough...

Thanks for taking the time! My subjective impression was that this problem was less prevalent in the literature for Part 1. However, in Part 2 basically every other page I come across some ambiguous wording. Then I draw my circles around the BT notes, BT forum, the original literature, Schweser...

Study notes R76.P2.T8: whereas the book says:

I have the same question. Also, in the study notes you mention, volatility, IC, scale and score. Then there is a table where "modified alphas" are presented: However, there is no definition for "modified alpha". Is it the score, i.e. alpha divided by the scale? Also, the notes suggest that...

Same chapter: Should be 2.25%.

In the finalizing Basel III chapter (R69): According to the Basel paper: NOTE: Fixed and updated in the study planner

The "cost of capital" in the RAROC numerator does not include the "cost of shareholders' capital" which is part of the EVA definition, correct?

Thanks, this makes a lot of sense. I got stuck on the formulas so that I did not see table 4.5.

Hi, in book 2, chapter 4 (or the BT study notes), the following definitions are presented: I do not understand how to read the second definition. [t, t+k) is a continuous set. Therefore, I do not see how the numerator is supposed to be defined here. Even if I assume that we simply iterate...

You are right, of course. Thanks :)

Hi! The LO does not say anything about calculating the correlation measures. Do we need to do this in the exam?

With regard to my studying: 250-280 hours I used the Schweser books for all the LOs, concepts etc. If in question I referred to the GARP books, sometimes also the BT study notes. I found the Schweser notes most accessible due to the very clean formatting and typesetting. Also the way they were...

Mine as well. For the moment I'm at 1111 and pass. I hope it will be the last flip for this time.

Mine shows 4444 and passed. I'm very certain that my real quartiles are better than that.

Thank you very much for your detailed response, this makes a lot of sense to me!

In chapter 7 of book 1, network risk is defined. However, I do not understand it or the example that is given. This comes directly from Brunnermeier (2009) since it is identical to the book. In the given example Goldman has a swap agreement with the hedge fund which in turn has a swap...