Full Practice FRM 2009 - Question 22

[SJWong]

Hi David,

Can you please assist with this question?

Q22: What is the annualised rate of return earned on a cash-and-carry trade entered into in March and closed out in June?

a. 8.9%
b. 9.8%
c. 35.7%
d. 39.1%

ANSWER: C

I'm afraid that the answer is not particularly helpful as it references certain assumptions (eg. cost of carry) that are not given in the question.

Many thanks
Steven

 

[David Harper CFA FRM]

Hi Steven,

It's impossible to answer this question; i think this question has earned a nomination into the (crowded) field of worst GARP question ever...to ask for a quantitative answer with no assumptions given !!???

Please see here: http://forum.bionicturtle.com/viewthread/1221/
no doubt this is what they meant
...although credit to Surjam for spotting that even this answer given here is incorrect

Thanks, David

 

[narayananvenkat]

David..

For full exam, each session consists of 70 qns or 140 each?

venkat

 

[David Harper CFA FRM]

Hi venkat,

According to GARP:

How many questions will there be on the FRM Exam Full?

The FRM Exam Full will have 140 multiple-choice questions. The morning and afternoon sessions will be 2.5 hours each with a 90 minute break in between. This is exactly the same as past FRM examinations.

Thanks, David

 

[SJWong]

Hi David,

Thanks for pointing me in the right direction.

It does seem extraordinary that GARP is so prone to making these errors; in this case as you say, of the most obvious kind where there is not even a subjective issue over the interpretation of the answer (as there is with some of the more qualitative questions).

It's been many years since I did the CFA but I certainly don't recall there ever being this kind of confusion with questions (although to be fair, in one of the exams I did, there was clearly a mistake which someone spotted during the exam and they decided to annul the question.)

On a separate note, I just wanted to say how impressed I've been with your ability to continuously and consistently address issues raised in this forum with invaluable guidance, even in the last few days running up to the exam. No doubt it would be a conflict of interest for you to be more proactively involved with GARP's preparation of the exam itself, but I can only think that if they could find a David Harper clone with half of your talent, they would substantially improve the QC of their questions.

BTW since we're on the issue of QC, I notice that you typically spell 'curriculum' as 'cirriculum" throughout the website. Has GARP mandated a change in this word too?!

Steven

 

[David Harper CFA FRM]

Hi Steven,

The error rate is, er, "interesting." From my perspective, it's simply a lack of incentives combined with the inherently fragmented one-time nature of the customer base, which otherwise (you would think?) would impose some kind of accountability; e.g., the financial crisis obviously increased demand for the credential, and I worry this gives "air cover" to a lack of discipline in this regard (ironically!). I have and do give GARP detailed feedback, btw, but you can lead the horse to water but if he's not incentivized to drink....

Thanks for your kind feedback!

Re: cirriculum: ooops, bad habit (I am not a great speller). Now I know better, from now on it's nothing but "currriculum" for me

Thanks, David

p.s. i actually mis-spelled curriculum again in my response to you...20 minutes later i came back to check...fixed...old habits die hard
p.p.s i've decided it may be less painful to simply use a synonym (e.g. course) ... more than you wanted to know