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Just my observation in many other internet forums or sources. They said that, the FRM exam (both part 1 and 2) passing score is variable. Firstly you take the average score of the top 5% quartile candidates. Then you take a 75% discount on it. The resulting figure is the passing score. So...

Chapter 15 - Analysis of Variance You're welcome (shake hands)

Yeah I'll use 3FM in your case too (if I can get the data). So don't worry. I only have a hardcopy of the book. One of my friend has found an e-book version but I'm afraid of pirate issue so I think you gotta use your own way to find Ch.15 as you need......

Actually I'm just 依書直說 (making interpretation only according to existing books/literatures and making as less subjective comments involved as possible) only. So I'm only stating those authors' insights. Thanks for your comments. Now I get what you're saying. I've only read Bodie/Kane/Marcus's...

According to Phillipe Jorion's 2011 FRM Handbook Plus Test Bank, he defines the tracking error as the difference between portfolio return and benchmark return. Then he defines the tracking error volatility as the std deviation of the difference between portfolio return and benchmark return...

If you subtract the portfolio return from the benchmark return, the difference is called tracking error, not alpha. Alpha must be calculated by reading the intercept of your regression model. So of course they're different. Tracking error is the distance of portfolio return from the benchmark...

Mainpoint: CQF requires a costly £12,500. A Master of Financial Engineering also requires similar or even more costly expenses. Of course I know what you're saying is the reality but......who doesn't know a mother is a woman? If one can enter into an ibank for even just a job position as an...

I don't have any idea of video/document about ANOVA, so I can only suggest you to read a book which was used to be my favorite: John E. Freund's Mathematical Statistics This is a good book. Clear mathematical procedure, rigorous argument, and most importantly - very incisive, no rubbish...

But I can tell you that the same comment prevails in the case of CFA. Those guys in the Hong Kong internet forums also mention that CFA is useless in finding an analyst job in banks/ibanks/funds/other institutions. The most common reason is, CFA has been over-saturated already. Too many people...

Well if you use the single factor model (i.e. what you called using CAPM), you will get an alpha larger than if you use the multi-factor model (i.e. 3FM). This is because the larger part of the alpha is due to the two extra factors in 3FM. When you did not include these two extra factors in the...

I still haven't received it yet, it's been about 1 month already...... I don't know either...... I'm from Macau, and I've heard a lot of Hong Kong people in many internet forums saying that FRM is of no use to find a risk or analytic-related job in banks or ibanks or fund houses or sth like...

You can treat "incremental performance of the asset relative to the benchmark return" and "the return attributable to skill or luck of the portfolio manager" are both containing the same meaning - they are the abnormal return due to something not able to be explained by the benchmark/market or...

Strictly speaking, CAPM does not allow any alpha (outperforming profit opportunity) exists in the CAPM equation. This is because of the troublesome assumptions behind CAPM - the market is at equilibrium and investors are rational. If both assumptions are met in the reality (actually sometimes...

OIC......well let me try to answer your question. I'll split the answer into 2 parts. First, when you use regression to estimate the CAPM equation, it doesn't matter whether the dependent variable should be a specific stock or a stock portfolio. CAPM does not require the dependent variable...

you mean where does the "46 basis points" and "about 5.5% per year" come out from?

firstly, what do you mean by "from whom i can trust"?

Yeah I think you can use alpha becoz it's the return figure due to unsystematic risk.

At this stage, you may ask how can we know if the model is rational or not? I can say that, we can't really use the knowledge of statistics to judge the answer to this problem. That's why we need to study finance theory if we're dealing with stock return regression, we need to study psychology...

A little reminder: R^2 will just increase anyway, even if you add a statistically insignificant variable in the model. Adjusted R^2 will increase only when you add a statisically significant (in the F-test sense) variable in the model.

I don't know if my answer helps but I'll try. As you said, R^2 will just increase anyway when you just simply add more independent variables on the right hand side of the regression function. This means if you use Microsoft's stock return as the dependent variable and NASDAQ 100 index return...