Exam Feedback May 2019 Part 1 Exam Feedback

[tweakpun]

Have realised I made a ton of silly errors by not reading the questions correctly - function of being pressed for time I guess.

To add to the list:

30. Barings bank collateral
31. Wac and wam
32. M'schaft question
33. Portfolio insurance
34. Something about a ccp and its risk - wrong way risk or liquidity?
35. Erm question - can't remember specifics.

Does someone remember the options/answers to either of these questions?
34. I marked wrong way risk although I'm also unsure between wrong way risk and liquidity.

Regarding the convertible bond/callable bond question, was it option C which mentioned somewhat like "...convertible bond detrimental for investors..."?

 

[Rohanm94]

Does someone remember the options/answers to either of these questions?
34. I marked wrong way risk although I'm also unsure between wrong way risk and liquidity.

Regarding the convertible bond/callable bond question, was it option C which mentioned somewhat like "...convertible bond detrimental for investors..."?

I guess convertible bonds are beneficial for investors as it gives u an option on company shares.

 

[tweakpun]

I guess convertible bonds are beneficial for investors as it gives u an option on company shares.

Yes, my bad. I wrote it the other way round. I think it was callable bond written in the options then. Anyone remember this question or its options?

 

[shantharam1]

Does someone remember the options/answers to either of these questions?
34. I marked wrong way risk although I'm also unsure between wrong way risk and liquidity.

Regarding the convertible bond/callable bond question, was it option C which mentioned somewhat like "...convertible bond detrimental for investors..."?

Callable bonds are detrimental for investors, convertible are beneficial. AFAIK, the question was also based on Callable bonds.

 

[Rohanm94]

I remember choosing something like "Convertible bonds are beneficial for investors and trade at a premium compared to NCDs"

 

[Lasberm]

I remember these questions:

• Metallgesellschaft
• ERM
• Stress Testing
• Risk Data Aggregation
• ERM
• Calculate bond price
• Put Delta
• Conversion Factor
• Bayes Theorem
• Stress Testing
• Country Risk
• Calculate ES
• Calculate Var 2%/ VaR 99%
• Penalty Factors MSE/Akaike/Schwarz
• Seasonility
• Information Ratio
• Sortino Ratio
• CAPM
• APT Factor Model
• WAC and WAM
• GARP Code of Conduct
• CAPM assumptions
• Covariance
• Hypothesis Testing
• T-distribution
• EWMA model
• GARCH model
• Long-rung average variance
• Gaussian Copula
• Hedging Futures Beta
• Put- Call Parity
• Arbitrage
• Strategy: Bull/bear/covered/protective
• FRA
• Interest Rate Swaps
• Currency Swaps
• Delta-Normal Method
• One step binomial model
• Central Counterparties CCPs
• Credit Rating
• Operational Risk
• Unexpected Loss
• Unexpected Loss calculate LR
• Loss frequency/Loss severity
• Spot Rate
• Forward Rate

 

[rafael_mv3]

It appears convincing with these facts. But not true to spirit of protective put which is to protect from loss. Also in bull spread, you actually write an out of money call - to subsidize call you have bought. What if I write a call with strike of 55. Then bull spread seems convincing....

I understand your point of view, but the protective put is intent to limit the loss with unlimited gain, while the bull spread limits the loss and the gain. With the strike price high 55, the protective put will be the best choice because PT < CT , the call out-of-the money will not be exercised and the premium received by writing this deep out-of-the money call is almost zero.

 

[VWJETTY]

I remember choosing something like "Convertible bonds are beneficial for investors and trade at a premium compared to NCDs"

Yeah I got that too bc they have the optionality to convert to stock so they should be priced higher than regular debt.

 

[VWJETTY]

Does someone remember the options/answers to either of these questions?
34. I marked wrong way risk although I'm also unsure between wrong way risk and liquidity.

Regarding the convertible bond/callable bond question, was it option C which mentioned somewhat like "...convertible bond detrimental for investors..."?

i think 34 has to deal with like what happens if a ccp defaults. and for that i think i had the risk is that if a ccp defaults then the members that clear with the ccp will be liable to divide up for the default amount. but i don't think non-members are obligated to pay for it. or something along those lines.

The wrong way and the liquidity risk i think had to deal with raising debt right? So I said it was liquidity risk.

 

[VWJETTY]

It appears convincing with these facts. But not true to spirit of protective put which is to protect from loss. Also in bull spread, you actually write an out of money call - to subsidize call you have bought. What if I write a call with strike of 55. Then bull spread seems convincing....

Yeah I put bull spread as well. I don't think the questions though had numerical figures either.

 

[subha107]

Guys, while filling the OMR sheet credentials, I made a error in filling the last digit bubble of my student no ( filled the last digit of my seat number instead) then corrected by filling the correct bubble. Do you think Garp will take harsh steps ( not evaluate my OMR ).

 

[Nicole Seaman]

Guys, while filling the OMR sheet credentials, I made a error in filling the last digit bubble of my student no ( filled the last digit of my seat number instead) then corrected by filling the correct bubble. Do you think Garp will take harsh steps ( not evaluate my OMR ).

I recommend that you contact GARP to ask this question so you can get an accurate answer. They are the only ones who can answer questions about their policies and procedures. You can contact them at [email protected].

Nicole

 

[subha107]

I recommend that you contact GARP to ask this question so you can get an accurate answer. They are the only ones who can answer questions about their policies and procedures. You can contact them at [email protected].

Nicole

Thank you Nicole . I have written to them , waiting for reply.

 

[nikic]

Guys, while filling the OMR sheet credentials, I made a error in filling the last digit bubble of my student no ( filled the last digit of my seat number instead) then corrected by filling the correct bubble. Do you think Garp will take harsh steps ( not evaluate my OMR ).

No. Make sure you send them an email. I made an error with my candidate number for Part 1 back in May 2018 and yet I passed without any issue. I’d did reach out to them and explain what happened though, via email.

 

[VWJETTY]

i sent them an email too. because our proctor said "fill out your GARP ID" and i think we were suppose to fill the first two with zero's so it fills the entire field with numbers but he never said that part. So after i filled out the GARP ID, i had two extra place holders empty. Sent them an email this morning. They haven't responded yet.

 

[shantharam1]

What is the thing about the Carbon copy system? Should the carbon copy be an exact replica of the main answer sheet? I am a bit worried because in the end I noticed that my bubble marks weren't exactly copied into the carbon copy bubbles (by a considerable margin) and some were very light looking that they might go unnoticed. Can someone please clarify.

 

[Detective]

What is the thing about the Carbon copy system? Should the carbon copy be an exact replica of the main answer sheet? I am a bit worried because in the end I noticed that my bubble marks weren't exactly copied into the carbon copy bubbles (by a considerable margin) and some were very light looking that they might go unnoticed. Can someone please clarify.

My own research into the subject and what I was able to divulge out of a senior exam proctor seems to suggest the "carbon copy" is essentially irrelevant. I think they have it as a validation check in the event they are suspicious, but it is not actually used in the actual scoring.

Regardless, I would recommend emailing GARP at [email protected] your question with your candidate information so you get an official reply for the extra peace of mind. They take a while to respond though, so it can take up to a week. If you do get a reply, please post back on this thread.

 

[shantharam1]

My own research into the subject and what I was able to divulge out of a senior exam proctor seems to suggest the "carbon copy" is essentially irrelevant. I think they have it as a validation check in the event they are suspicious, but it is not actually used in the actual scoring.

Regardless, I would recommend emailing GARP at [email protected] your question with your candidate information so you get an official reply for the extra peace of mind. They take a while to respond though, so it can take up to a week. If you do get a reply, please post back on this thread.

Sure, thanks for the prompt reply.

 

[mariomansour]

I remember these questions:

• Metallgesellschaft
• ERM
• Stress Testing
• Risk Data Aggregation
• ERM
• Calculate bond price
• Put Delta
• Conversion Factor
• Bayes Theorem
• Stress Testing
• Country Risk
• Calculate ES
• Calculate Var 2%/ VaR 99%
• Penalty Factors MSE/Akaike/Schwarz
• Seasonility
• Information Ratio
• Sortino Ratio
• CAPM
• APT Factor Model
• WAC and WAM
• GARP Code of Conduct
• CAPM assumptions
• Covariance
• Hypothesis Testing
• T-distribution
• EWMA model
• GARCH model
• Long-rung average variance
• Gaussian Copula
• Hedging Futures Beta
• Put- Call Parity
• Arbitrage
• Strategy: Bull/bear/covered/protective
• FRA
• Interest Rate Swaps
• Currency Swaps
• Delta-Normal Method
• One step binomial model
• Central Counterparties CCPs
• Credit Rating
• Operational Risk
• Unexpected Loss
• Unexpected Loss calculate LR
• Loss frequency/Loss severity
• Spot Rate
• Forward Rate

In addition to the above, these are a couple of questions I recall:

1- A question related to Antithetic & Control variates; I marked Antithetic not sure if it's the correct answer though.

2- A question related to foreign exchange risk (CHF and euro denominated loans).

3- Banking & trading book.

4- Deriving spot rates from discount factors (if I remember correctly the answer was 2.01%)

5- determing if a strategy is a Bull or Bear spread (I suppose it was a Bear spread with a max of USD 15 and min of USD 2)

 

[deepakaggarwal2019]

There was a question on Bayes Theorem could not get the correct answer. Anyone got correct match ?

Yes..I think I did. I got the answer as something like 40%