frmpart2dan
Member
It is possible both is correct in that way GARP will just mark either answer of you on that qns to be correct answer
Exam Feedback November 2016 Part 2 Exam Feedback
- Thread starter Nicole Seaman
- Start date
fjc120
Member
One can only hope. Maybe the spreadsheet one too both are correct with legal answer. :/
Think the following formula was relevant for this (1+s2)^2=(1+s1)(1+f1,1) but it wouldn't give me any of the answers
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My feeling is GARP simply provides the topics and reading materials. They do not want to "spoon feed" the candidates. It is up to the candidates to master the material on their own. I think that is the appropriate approach.
Like what I mentioned, if a "professional exam" simply recycles test questions from a test bank, it becomes too easy and the certification loses value. All the candidate has to do is spend enormous amount of time memorizing, regurgitating, etc all available past examples. It becomes mechanical. It doesn't test problem solving skills, intelligence and real quantitative and critical thinking skills.
But if a test contains new, tricky, multi-level and multi disciplinary questions, it raises the bar further and tests candidates real problem solving skills. I think that's what differentiates this exam from other exams.
Personally, I hope GARP continues in this path. This guarantees that FRM holders have mastery of the subject matter PLUS excellent problem-solving skills.
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emilioalzamora1
Well-Known Member
the Total Return Swap answer was for sure nonsense as they mixed up the appreciation/depreciation of buyer/seller.
I chose the answer with the Credit-Linked Note.
I chose the answer with the Credit-Linked Note.
I think CLN is wrong
http://www.barbicanconsulting.co.uk/cln
If default happens, the CLN worth less then the underlying reference
I chose first to default put. When the correlation is high, one default results in all default, hence the buyer may request higher premium which covers all potential losses. Correct me if I am wrong.
Unfortunately, First to default put is wrong..
Default correlation plays an important role in a basket CDS.
If the reference assets are perfectly correlated, the payoff of the first to default put will be the same as the nth to default put.
When correlation is low, The payoff to junior tranche investors will be higher than senior tranches.
Thus, When First to Default Put correlation low, premium is high.
With low correlation between assets, there is a likely chance that 1 to 5 defaults will occur out of 100 assets.
There are some First to default put questions in BT and Schweser.
CLN seller has no counterparty risk and no credit risk. but CLN buyer has counterparty risk.
I think CLN seller ~ cannot ~ ...is correct.
If there is no credit event by the reference entity, the investor receives back the principal investment plus coupon.
If there is credit event by the reference entity the investor receives a bond issued by the reference entity
The investor will have experienced a loss as a result of the credit event because the delivered bond will be worth less than the original sum invested.
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frmpart2dan
Member
I know result is out by 3 Jan but last year it was much earlier, can we expect to receive the results before Chrismast?
I chose Credit Linked Note for all its worth
emilioalzamora1
Well-Known Member
I am not sure about the CLN myself, I devoted quite a while to this one during the exam. Following the CAIA curriculum I have my doubts that the CLN answer with the collateral is correct (even if I chose it in the end). What's for sure: TRS is wrong.
frmpart2dan
Member
Guys I heard that minimum pass rate from past exam was 43%. Could someone confirm?
equanimity
New Member
From whom did you hear this?
Do you mean the pass rate or the passing score?
frmpart2dan
Member
I read on internet someone was very sure he got 34 questions right only but passed at 1 1 4 4
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