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David Thanks I passed the exam. Thanks for your help and your screencasts. Paul Disse

Dear David, Thank you for your time the past months. I think i known you, because i spend so many hours lisening to you. Your screencast and your forum are great. The exam was somewhat disappointing. Because there where a lot questions about Var and the reading of the questions where very...

Thank you David Paul

Dear David, In the practice exams there are some questions about Putt-Call Parity and delta with dividend. Do we need to know al the formula with and without dividend. Is there a short way to memorize the difference in the formula. Kind regards, Paul

Hi Jop The answer most be 10,116 but it's not in the answers. There are more mistakes in the questions of the practis exam. In the same exam question 40,these answer ia else than the question. The questions asked for a *correclty* statement and the answer is given an *incorrectly*...

Dear David, I do understand this with correlation 1 or 0. But wat happens if there is a negatief correlation. There is a question 31 in practice exam 2008 II Kind Regards, Paul

Why is the volatility of the asset smaller than the volitility of the equity if leverage is constant? I read Rene Stulz but i didn't find this part. I also cann't find it in your notes and svreencasts. Kind regards, Paul

Theta, or "time decay," measures sensitivity to the passage of time, the time value.Time Value = Option Value - Intrinsic Value. Theta = -dV/dT. " Even a deeply out of the money put will be worth something as there is some chance the stock price will fall below the strike. However, as...

David, Thanks. Sheets explians the relation between maturity and PD in the Merton's model. I'm not always happy with the practice questions. Thank you for your time. Paul

Thanks David, The explanation from Jorion is the exact explanation GARP gives in question 99 from 2007 FRM Practice exam III. But the are referring to the Merton's Model and not to the rating transition matrix. Is there any link between the Merton's Model and this explanation? The only...

Found the answer. My mistake. BBB or Baa bonds are above BBB- or Baa3 and so the are investment Bonds. Sorry for your time. Regards, Paul

The (Garp) said the answer is c. Sorry typo.

Dear David, Question 105 from 2007 FRM Practice Exam III This question is about the investment grade rating. From the study notes i know this must be BBB- (S&P;) or Baa3 (Moody). The answers are: a. BB (S&P;) , Baa (Moody's) b. BB (S&P;) , Ba (Moody's) c. BBB (S&P;) , Baa...

I'm also confused by this. It's question 31 from the first practice exam from 2007. But agencies try to incorporate business cycles so the are trough-the-cycle and i thought credit rating would be more stable. At-the-point-in-time is the credit quality over the near term and i thought...

Dear David, Last year there was a LO 55.7 Calculate and explain the benefits of using default swaps to reduce regulatory capital. The risk Weights for credit risk in Basel II are reduced with the use of default swaps. Is it possible that this topic would be in the exam of 2008...

Dear David, In de quiz on Market Risk there's question 4. In this question we have to calculate the forward rate for a Euro Dollar future contract with convexity adjustment. I'm missing the step for annual compounding to continuous compounding. "This corresponds to 8.031% with continuous...

:red: sorry. Your right(as always). Of course Beta can be negative.

Dear David, In the formula of “Best Hedge” in Investment Risk there is a negative sign. –W * Beta *var(p)/Var(i). What is the meaning of this negative sign? Do you always have to sell (short) the asset i? Kind Regards Paul

Dear David, I have question about all the formulas in the different reading. Market risk The beta to hedge a equity stock. In your answer of 6 august you said it was :“Value of Futures contracts/Portfolio (as above we are adding $1/$10 = 0.1)” . Which I can understand. There is also...

Hi Arne, I asked GARP within what time the "Coming Soon" reading would be ready. The told me last week it would be ready within six weeks. Hereby there answer, We anticipate the readings to be available in the next 6 weeks. Once available, you will see a link on the GDL website that...