Question about calculus

[Mathrio]

Hi david,

I've been studying for about a month now and I am currently on the quantitative analysis part of the curriculum.

I came across some calculus while reading your note but never really paid attention to it as it seems to be shown as a bonus rather than being mandatory. There seems to be more and more calculus as I go through the notes and it got me a little scared.

I am not well versed in calculus and i'm wondering if it's mandatory to pass the frm exam. Should I start reading up on calculus? If so, should I know about more than how to derive and integrate?

Thanks,

- Matt

 

[David Harper CFA FRM]

Hi @Mathrio

Calculus came up briefly in the recent FRM Webcast ("Risk Careers and the Benefits of Professional Certification" at http://www.garp.org/risk-news-and-resources/webcasts/upcoming-webcasts.aspx ) and I thought one of the participants (an FRM holder) got it about right: it's helpful to brush up, or have a basic understanding, I think he said. It's becoming a little harder for me to answer the question; i.e., it seems like calculus is becoming a bit more useful (as evidenced by Miller readings, eg).

My view has two parts:

• I do not think calculus proficiency in mandatory simply because you will not be asked a strict calculus question on the exam (as of 2014).
  
• However, at the same time, there can be little doubt that calculus proficiency renders a significant portion of the material easier, if not much easier, in particular market risk concepts (e.g., option Greeks) and Jorion's portfolio VaR (P2.T8). But, here, you only really need the traditional introductory components, namely basic derivatives and a bit of integration is helpful to comprehend expected shortfall in Dowd. I hope that helps!

 

[Nicole Seaman]

@David Harper, CFA, FRM, CIPM and @Mathrio,

To add to your comment, when I went back to college after being out of school for many years, I had to take calculus. It was very confusing in the beginning, but I attribute a great deal of my passing grade to the book, "Calculus for Dummies." My professor is actually the one who suggested it to our class. It has all of the basics that you need to learn without all of the "jargon" that can get confusing for people who are not proficient in calculus. This is just a suggestion, as I know that anyone taking the exam doesn't need to be proficient, but they need the basics to understand the materials. You can purchase it on Amazon.

 

[Mathrio]

First of all, thank you David for your quick answer

Second, Nicole, it's funny that you mention Calculus for dummies because right after creating my forum post I went ahead and bought exactly that book on Amazon!

I understand that calculus is not mandatory to pass FRM but also that it's better to know calculus rather than stay in the dark. I will read up on it.

Thank you for answering, keep up the good work!