Under Topic Valuation and Risk Models-Relevance of Chapter 5 and 6 from Tuckman.

[Anir]

Hi David,
While going through the video under Valuation and Risk model for the topic in chapter 5 and 6 in Tuckman, you mention about low relevance in the inception.
My questions are:

1. Does these two chapter i.e. 5 and 6 still have low relevance for the FRM Part 1 exam scheduled in May 16 2015 since your video was uploaded/ created in 2012?
2. Were there any questions from these chapters in FRM part 1 exam in May and Nov 14?
3. Could you discuss the questions that were in the actual exam as GARP's website does not have specific mention of question that are a part of the real exam. However there are practice questions from 2010 to 2014 in GARPs website but I have a doubt whether these questions are from the actual exam question paper.

I have another question on Binomial tree: I came across questions where there are 10 or more steps in the tree for an American call or put option to find the payoff.

1. Is there a short cut method to find out the answer in case of 10 or more steps? else its time consuming to follow the process of finding the payoff for each node in case of American option since it has a in-built condition.

Thanks

 

[ShaktiRathore]

Hi
Regarding ur first question low relevance does not mean the questions wont come from this topics,yes there are less probable chance of them appearing in exam than most relevance topics but still there are some chances of some question from these topics so why take chances itd better to be prepared than not. Even if question do not appear in the exam from these topics studying them shall not hamper your chances in the exam or tour knowledge but only shall improve them.
Regarding 2nd question the 10steps are too much for the exam rest assure acc. To me, exam shall not go beyond 3/4 steps,i think David has included 10steps type questions to better prepare you for the exam and if u have practiced the difficult one then u can ace the much less difficult questions for the exam
Thanks