Exam Feedback November 2018 Part 2 Exam Feedback

[Nikita Gusev]

there was a question about collateral before the court decision or after the court decision.. i have chosen after the court decision

IMO, in case of CSA (ISDA) we see an outright transfer of title in collateral by the counterparty that is required to provide collateral. So no need for court for secured party to get ownership of collateral.

 

[vrmua]

Does someone remember the result for the regression hedge...? Was it 380 mln or 105? As DV01 was half of the bond he wanted to hedge, i chose 380 mln

I think Answer should be 105. You may simply multiply the 380 by the Beta (from the regression) so, 380 * 0.276 = 105

 

[matt6558]

I think Answer should be 105. You may simply multiply the 380 by the Beta (from the regression) so, 380 * 0.276 = 105

Was it C or B? I think I picked C or B for this question, but not quire sure..

 

[max8126]

I think Answer should be 105. You may simply multiply the 380 by the Beta (from the regression) so, 380 * 0.276 = 105

Wasn't the regression beta greater than 1?

 

[shailthakker]

Wasn't the regression beta greater than 1?

Yes it was 1.04 or something

 

[jaivipin]

I am thinking, we have overall covered around 20 - 25 questions here in the forum. Total we had 80 questions, so lot of questions are still unclear.
Given level of exam was super high, no one is really sure who will pass or not. So still let us keep hope we clear the exam.

Thanks

 

[vrmua]

Wasn't the regression beta greater than 1?

Yes it was 1.04 or something

In this case I must've picked the incorrect Beta

 

[truongngo]

IMO, in case of CSA (ISDA) we see an outright transfer of title in collateral by the counterparty that is required to provide collateral. So no need for court for secured party to get ownership of collateral.

I think you are correct. According to the notes:

In contrast, collateral posted against derivatives positions is, in most cases, under the control of the counterparty and may be liquidated immediately upon an ‘‘event of default’’. This is due to the laws governing derivatives contracts and the nature of the collateral (cash or liquid securities under the immediate control of the institution in question). Exposure, in theory, can be completely neutralized as long as a sufficient amount of collateral is held against it.

 

[Yairw]

Hi guys...

I attempted both the levels n this was my first attempt..I had gone thru all the reference materials and covered both levels spending approximately 400 hrs ..since I have an MBA level 1 preparation was relatively easy ..so I spent a significant amount of time on level 2...I didn't have time to do any mock tests or practice questions either...just had a good reading of the materials ...level 1 is pretty easy for me..level 2 I found the numericals were straight forward n of average difficulty..theory questions I too could boil down to two options before making an educated guess... nevertheless just waiting for results to be declared....all the best guys

Kodus to you for attempting the 2 parts on the same day! I understand not many people do that. Good luck!

 

[koga]

Hi Guys

Lets keep the positive spirit that we will sail through. By the way does GARP issue a certificate after completing Part II ?

 

[antogiar]

Hi Guys

Lets keep the positive spirit that we will sail through. By the way does GARP issue a certificate after completing Part II ?

of course

 

[koga]

of course

Ok thanks. I thought they will issue it only after 2years of experience.

 

[faisalfshaikh40]

Ok thanks. I thought they will issue it only after 2years of experience.

Yes post you submit your work ex details!

 

[[email protected]]

Does anyone know why how to solve that CVA problem (which had a discount factor)? I wasted a lot of time thinking about it.

 

[antogiar]

Does anyone know why how to solve that CVA problem (which had a discount factor)? I wasted a lot of time thinking about it.

Sum of EE*PD*LGD*DF

 

[jkowalonek]

Sum of EE*PD*LGD*DF

I used that formula too, but someone else posted you need to adjust the PD for the second year? I just used what they gave me in the table.

 

[Seamus]

I used that formula too, but someone else posted you need to adjust the PD for the second year? I just used what they gave me in the table.

Correct, you should calculate marginal PD, not just using the one in the table.

 

[matt6558]

I know this issue is always discussed given the level of difficulty of the exam, what would be the MPS for the part 2, this year. (55% or above?)
I know part 2 seems always difficult, if I read the old forums (the past year's feedback on the exams), I am just curious.

 

[anirudhjay]

I know this issue is always discussed given the level of difficulty of the exam, what would be the MPS for the part 2, this year. (55% or above?)
I know part 2 seems always difficult, if I read the old forums (the past year's feedback on the exams), I am just curious.

After writing Part 2, I have a hunch (that is best not taken too seriously) that a 40+ score out of 80 is a guaranteed pass. That said, I've always felt more serious candidates tend to flock forums such as Bionic Turtle, and usually end up overestimating the kind of performance required to pass.

 

[ferri]

After writing Part 2, I have a hunch (that is best not taken too seriously) that a 40+ score out of 80 is a guaranteed pass. That said, I've always felt more serious candidates tend to flock forums such as Bionic Turtle, and usually end up overestimating the kind of performance required to pass.

Hope so...