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Hi, Thank you for your contribution and thoughts! Regarding the numerical question 15, as far as i know there were 2 tail test and in case of 2 tail test t stat was less than critical value and therefore fail to reject the hypothesis. more likely, it was final option! I did in that manner.

One more question who remember it?? 1. question about what is the drawback of the stress testing. I marked: Stress testing is highly subjective (but im not 100% sure, but considered this choice much more reasonable within the set of answers) 2. Question about the delta normal Var deficiencies...

Hi İdea behind Cheapest to delivery bond is as follows: Let say you are in short position in the interest rate futures and at maturity you must deliver treasury bond with maturity more than 15 years and non callable within this maturity. Generally, short party interested to deliver cheapest to...

can I ask you kindly which was your choice for that question? short straddle

In terms of profit made: 1. for volitile market long straddle (significant profit) > long butterfly (small loss) long straddle (significant profit) > short butterfly (modest profit) in the short butterfly, modest profit is due to limiting its up and down profit potential by strike price K1 and...

It is clear that the short straddle is risky strategy in the real market and can yield hypothetically unlimited loss. But the question assumed to choose strategy for non volitile market!

that is also true. But I dont think that answer appeared there.

In the exchange for Physical arrangenment, the parties privately negotiate the terms of the delivery and then inform the clearinghouse about. Obviously parties know each other. But, the question in the frm exam doesnt assume exchange for physical.

Yeah, short straddle is good strategy for non volitile market. That is correct answ.

reference to the guys who persist in their answers, specifically "Where to deliver". http://www.wipro.com/Documents/resource-center/library/Clearing_House_Functions.pdf Meanwhile, I stop the comments on this question.

The party in the short position chooses what quality/when to deliver/where to deliver as per contract specified by the exchange!!! Strongly encourage you to look at real futures contract designed by exchange (e.g CME groups corn futures ) and read carefully procedure on delivery. If the contract...

Thank you! Then how the seller invoice the amount to be paid by the buyer if the buyer unknown???!!! It looks illogical.

Hi, In the Exchange traded market, in most case the both party in the transactions doesn't know each other. Loosely speaking, let say you are long position in futures contract and after a three month you took the short position on that futures and closed your position. So, while you have closed...

Guys, do you remember the question in regard to beta of stock index futures. Currently, beta is 1.2 and investor reduces it from 1.2 to 0.9. It is required to calculate number of contracts on stock index futures. I don't fully understand the final wording of the question, whether they asked how...

Hi, do you remember the question in regard to beta of stock index futures. Currently, beta is 1.2 and investor reduces it from 1.2 to 0.9. It is required to calculate number of contracts on stock index futures. I don't fully understand the final wording of the question, whether they asked how...

This question is purely operational risk question. Therefore, the issue highlited in the question can be solved by looking to the topics frm program covers. Personally, I think right topic is john hulls chapter. In fact, i didnt find any reference to the answer that you have argued. However...

"The key data issue is the fact that relatively little data exist that is highly relevant. According to Hull, the loss frequency distribution should be estimated from the bank’s own data as far as possible. In regard to the loss severity data, regulators encourage banks to use their own data in...

"The key data issue is the fact that relatively little data exist that is highly relevant. According to Hull, the loss frequency distribution should be estimated from the bank’s own data as far as possible. In regard to the loss severity data, regulators encourage banks to use their own data in...

thank you! you finally solved my doubt, actually not as I would have liked because I selected the place to deliver, but at least now I know which was the right answer I also remember that one question was about an analyst or someone that had a very small amount of data at disposal for a...