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For b, there is probably a formula, but easier to just match things up. closing 1800 1400 closing opening 1200 1600 opening closing 1400 1400 closing closing 400 400 opening opening...

If I were in his shoes I would: Demand a no fee seat in the next exam. or Try to chargeback on my credit card, and and if that did not work, send a demand letter from a lawyer, and then take them to small claims court. I would love to see Judge Judy handle this one.

It may be their rules, and it may or not be legal, but it is definitely bad business in this day and age. On GARP's side, they should send the final warning email that says, if you do not select, we will select the closest available site to you, or something like that. And if he registered...

Not nice!

Is GARP at least going to give him a credit for the next exam, or is he just out $600?

And the post-mortem. Credit Suisse had a poor risk culture. https://www.bankofengland.co.uk/news/2023/july/the-pra-imposes-record-fine-of-87m-on-credit-suisse

The question is about exercise or not. As long as you own the call yo have that "option." Once exercised it is gone and you can't get it back. The call gives you a positive delta position in the underlying, but if it goes down you only lose your premium. So you call is insuring you against a...

The stripping is usually done by bankers looking who have markets for the different components (and they make double the fees by servicing two different customers.) Again it's not that they are giving a discount. You must compare yields, and maybe their business model does not have the cash...

The issuer of a zero coupon bond does not have to pay coupons. They just need to return the face value of the bond when it matures. Example of a company that might choose to issue a Zero is an apartment building developer. They need money today to buy the land and build the building, but they...

At $60, the maintenance margin requirement is: $60 x 100 shares x 125% = $7500. Between the initial sale and what he posted he started with $7500 in the margin account, but up $10 his 100 shares loses $1,000, and now he only has $6500 in his margin account and the maintenance requirement is...

What is the source of these questions? 5.15 is a mess. The initial margin can not be $30,000, you are correct, and if it was, according to the question the trader would need to lose $10,000, not $1,000 to incur a margin call. 5.16 is a formula from GARP's book, Financial Markets and Products...

They are borrowing money, on terms that fit their projected cash flows. That's why we try and evaluate all bonds with the same types of yields to see how they actually compare in value. Even if a Zero pays a slightly higher yield than a coupon bond, it may just be a better fit for the issuer's...

Do you have a source for this statemen? Are high option values anything deep in the money? Are low option values anything out of the money?

I am going to risk my reputation here and take a crack at this. Spread01 is related to shifting the z-spread up and down 0.5 bps and noting the difference in the price of the bond. A CDS requires the probability of default to calculate the price of a CDS. That probability can be derived form...

Maybe what is a little confusing in the graphs in your original post is the new mean is not denoted for the red skewed graphs?

Hello Amierul, these graphs look correct to me. Can you please tell me what you think looks wrong in case I am missing something? Sixcarbs

Good morning Professor and friends, I haven't been around for some time. Have been working full time, preparing for CFA, and getting yelled out for not making family time. I am trying to replicate this demonstration in Excel as a piece of a larger question. But instead of using n=4 I am using...

Hello fellow Turtles, Sorry I have been away so much. I have been preparing for CFA 2, working by day, and trying to start some side endeavors in whatever free time I have left. And parenting a toddler. Enough about me. I hope you are all feeling good about your FRM preparation as you come...

I recommend GARP chapter then BT chapter. Stick with it and those integrated BT questions should help you pick things up faster. I don't think GARP assumes you have any prior statistics knowledge, although it would certainly help.

I like this because I am always having to think about which way the cash is going. This works!