Current Issues in Financial Markets

[Roshan Ramdas]

Hi David,

I've read the full JP Morgan and MF Global case studies along with the consolidated notes published by BT. Your notes were absolutely helpful in summarising, the otherwise massive readings - thank you.

I see BT notes for 4 of the 7 case studies. Are there any timelines by when the remainder 3 case studies will be published please ?

Thank you,
Roshan

 

[David Harper CFA FRM]

Hi @Roshan Ramdas

Thanks for those kind words about the notes JPM and MFG notes, very much appreciated. Re timelines for the remainder: no, sorry, I don't have a timeline. We're going to get a draft of the 2015 AIMs pretty soon, and then we'll post a plan. I really don't like to get into specific promises anymore: it just creates additional communication and stress. We accept that we can't fill all of the "gaps" in the syllabus. It's just not our approach, right? We shift the mix in favor of what we think is helpful and adds value; for example, I'm currently writing an additional set of T2 quantitative And T7 Basel questions (both of which are already covered) because, I think, it's just a superior value-add than some other content alternatives ... don't get me wrong, I don't like that we have T9.CIs gap: as soon as we see the 2015 draft, we'll move to prep notes on any of them that overlap 2014/2015. I hope that explains, thanks very much!

 

[Roshan Ramdas]

Hi @Roshan Ramdas

Thanks for those kind words about the notes JPM and MFG notes, very much appreciated. Re timelines for the remainder: no, sorry, I don't have a timeline. We're going to get a draft of the 2015 AIMs pretty soon, and then we'll post a plan. I really don't like to get into specific promises anymore: it just creates additional communication and stress. We accept that we can't fill all of the "gaps" in the syllabus. It's just not our approach, right? We shift the mix in favor of what we think is helpful and adds value; for example, I'm currently writing an additional set of T2 quantitative And T7 Basel questions (both of which are already covered) because, I think, it's just a superior value-add than some other content alternatives ... don't get me wrong, I don't like that we have T9.CIs gap: as soon as we see the 2015 draft, we'll move to prep notes on any of them that overlap 2014/2015. I hope that explains, thanks very much!

Hi David,

No problem, I will work towards covering the remaining case studies directly from GARPs material. On a separate note, would you be able to shed some light on whether the Basel readings are a heavily tested topic please ?

Given that there are 14 chapters in the main Operational and Integrated Risk Management and only 20 marks assigned to this section (overall), have the Basel Readings been prominent in the earlier exams ?

Thank you,
Roshan

 

[David Harper CFA FRM]

Hi Roshan,

It's a great question (whether the Basel readings are a heavily tested topic?). Here is my opinion: I think the Basel representation is roughly predictive (accurate) or conservative when measured by number of readings/chapters or learning outcomes (basically, according to the syllabus). By conservative, I mean the exam may test more than we might expect. For example, in terms of number of readings, Basel gets about 1/3rd of T7.OpRisk (i.e., 6 readings out of 18 total. I realize you are instead counting 14 chapters rather than readings, but I'm not sure it's much different here). On this basis, I think it would be reasonable to expect 1/3 * 25% * 80 ~= seven (7) Basel questions P2 exam. I think that is a decent estimate on the lower bound: I think it's reasonable to expect at least 7 questions ... consider the 2014 Practice Exam P2 contains, I think I recall, no fewer than three (3) Basel questions, out of only 20 total; i.e., scales to 12/80 which feels like a pretty good upper bound. So, 7 to (10 or 12) feels like a good predictive approximation, and consistent with history.

Now, the first reading (60.) is the Basel II framework, which remains the foundation of Basel III. This framework document is huge and dense and we don't need most of it. By this measure--i.e., the number of pages--Basel is "over-assigned" to the FRM candidate. That is, there is a "study risk" of spending too much time in these pages (if passing the exam is the only goal, of course). I hope that is helpful. Basel is a topic where, more than most, I think the first question is: what's my goal here? If the goal excludes job-related or intellectually-related aims and is only concerned with passing, then I would advise being a bit "ruthless" in your approach and avoiding much of the detail. (More detail is coming before the exam as part of our regular content)

I appreciate the question because I prepping my usual annual feedback to GARP ahead of 2015 syllabus. Thanks!

 

[Roshan Ramdas]

Hi Roshan,

It's a great question (whether the Basel readings are a heavily tested topic?). Here is my opinion: I think the Basel representation is roughly predictive (accurate) or conservative when measured by number of readings/chapters or learning outcomes (basically, according to the syllabus). By conservative, I mean the exam may test more than we might expect. For example, in terms of number of readings, Basel gets about 1/3rd of T7.OpRisk (i.e., 6 readings out of 18 total. I realize you are instead counting 14 chapters rather than readings, but I'm not sure it's much different here). On this basis, I think it would be reasonable to expect 1/3 * 25% * 80 ~= seven (7) Basel questions P2 exam. I think that is a decent estimate on the lower bound: I think it's reasonable to expect at least 7 questions ... consider the 2014 Practice Exam P2 contains, I think I recall, no fewer than three (3) Basel questions, out of only 20 total; i.e., scales to 12/80 which feels like a pretty good upper bound. So, 7 to (10 or 12) feels like a good predictive approximation, and consistent with history.

Now, the first reading (60.) is the Basel II framework, which remains the foundation of Basel III. This framework document is huge and dense and we don't need most of it. By this measure--i.e., the number of pages--Basel is "over-assigned" to the FRM candidate. That is, there is a "study risk" of spending too much time in these pages (if passing the exam is the only goal, of course). I hope that is helpful. Basel is a topic where, more than most, I think the first question is: what's my goal here? If the goal excludes job-related or intellectually-related aims and is only concerned with passing, then I would advise being a bit "ruthless" in your approach and avoiding much of the detail. (More detail is coming before the exam as part of our regular content)

I appreciate the question because I prepping my usual annual feedback to GARP ahead of 2015 syllabus. Thanks!

Thank you David,......this estimate really helps and I will prioritise the Basel Readings accordingly.