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Hi David This is supposed to be an easy one but I am struggling with one Schweser question relating to delta hedging. Suppose that a call option on Stock Y with a strike price of $50 trades at $3 and that the delta on this option is equal to 0.5. Derivatives trader Ralph currently owns 10,000...

Hi all I may have missed something in the forum, and I am happy for someone to point me to an existing thread rather that opening a new one if this question already exists. I cannot figure out why the Var(EDF) is equal to EDF*(1-EDF). This may be a simple question, which may also indicate that...

Hi David Last one from me until the next weekend. With regard to the Taylor series of approximation, are we supposed to be able to calculate that on the exam? I am conscious that it involves cumbersome calculations, etc... Kind regards N

Hi David I am not quite sure why when calculating the risk neutral probability we do not use the risk free rate. Would you please shortly explain that? I note that it costs nothing to take short or long position in a futures contract but that just confuses me even more... Apologies for the...

Hi David, This may be a stupid question but I will ask anyways. I am reading this book that explains a method awfully similar to VAR. Risk equivalent exposure (REE) is a measure for what a bank can expect to lose at any single time with some degree of certainty. It is a function of Risk...

Hi David Have you come across the The swaps and financial derivatives library by Satyajit Das? Consists of four volumes each of over 1000 pages. Derivative produce and pricing, structured products 1, structured products 2 and risk management. I am currently reading the Risk management volume...

I have officially postponed my exam to May! With the MBA taking almost all of my time, I think it's the right choice. Anyone else?

Dear David, In regards to calculating expected geometric return, why do we substract (sigma^2)/2 from the mean? Regards Niko

There are 93 days left until L1 exam and I am totally lost. I've just passed CFA Level 1 and that doesn't seem to help me at all. FRM seems to me to be chaotically written. I read and read and new concepts appear all the time and the problem is I don't even know if I am making any progress. God...

Hey friends, Why haven't I received the risk magazine yet. I thought we were supposed to get it with subscription to the program Thanks