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    GARP.FRM.PQ.P1 Normal distribution vs distribution of risky assets

    Does anyone know if this is a part 1 or part 2 objective ? Compare the normal distribution with the typical distribution of returns of risky financial assets such as equities There was a sample question from GARP through email as below but not sure I've seen this objective in PART 1 books. if...
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    Call Option Price Convex Function of Strike Price

    Hi P1 Book3 Chapter 14 Page 176 says "Under any model, the price of a call option is always a convex function of the Strike Price" and then it shows Figure 14.6 where as the Strike price increases (X Axis), the call price increases (Y Axis). It would make sense if It's a convex function of the...
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    Bond price vs Forward Rate

    Hi, In Part 1 Valuation and Risk Models under 10.4 GARP material states the following. Does this apply only to Forward Rates, as usually Interest Rate (Presumably Spot Rates) and Bond prices are negatively correlated (ie if Interest rate > Coupon rate of the bond, then Bond price falls). The...
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    VaR for Equally likely outcomes

    Hi, The following is an excerpt from 2020 FRM Level 1 Valuation and Risk Models Chapter 1 Measures of Financial Risks. Can someone explain if there is a formula that can be used to calculate VaR for a given confidence level when there is a range of possible equally likely outcomes (Note: the...
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