Probability is one of the most useful topics whose application in finance and investment domain is pretty important. Let’s consider a practical example of one of the very interesting applications of probability.
You are a research analyst in an investment bank. Lets consider a hypothetical case, there are two firms in the power industry, Reliance ADAG, and Essar group. Government has decided to cut down the tax on the power sector. As a result of this information you believe the equity of Reliance reflects a 0.89 probability of such decision. The Essar group is equally benefited by the decision. But your analysis show that the equity reflects only 0.45 probability of such decision.

GARP www.garp.com, FRM Exam is to be held on November 20, 2010. The registeration for the exam is started from 1st June, 2010.
This time GARP has introduced a new exam format, with the exam consisting of two parts. Both the parts have different format and structure in terms of fees, syllabus and topics covered. Passing in the first part is mandatory for level 2 to be graded. If a candidate fails in part 1, part 2 will not be graded. Hence, next time if the candidate re registers he has to enroll for both the parts.
Part1 Details -
Total Number of Questions 100 MCQ’s,
Time 4 hour
topics with weightage
Foundation of Risk Management 20%
Quantitative Analysis 20%
Financial Markets and Products 30%
Valuation and Risk Models 30%

What is a bond?
A bond is a fixed interest financial asset issued by governments, companies, banks, public utilities and other large entities. Bonds pay the bearer a fixed amount a specified end date. A discount bond pays the bearer only at the ending date, while a coupon bond pays the bearer a fixed amount over a specified interval as well as paying a fixed amount at the end date.
What are Double-barreled bonds?
A revenue bond issued by a municipal or state authority that is guaranteed by the overlying municipal or state authority.
For example, if a transport authority for a state issues a bond, in the event of a revenues from the transport authority are not enough to pay back the bond, the state government would use its tax revenues to make the interest and principal payments.
So, for these bonds, the cash flows are pledged by two distinct entities. The First entity is under obligation to make interest payments, whereas the other owes the principal payments.
These are municipal general obligation (GO) bonds as in contrast to revenue bonds because they are backed by the issuer and its taxing authority.

Embedded Options It is common to grant issuers and bondholders an option to take an action against the other party regarding the owed money, either with the principal or the coupons. Such options have a significant effect on the behaviour of the bond price because of the potential modification of the cash flows that the action may cause. Although not explicitly priced in the market, the options carry implicit economic value and are reflected in the prices of the bonds. These options are known as embedded options.

(B) Risk Managers – PRM | FRM Holders:
Here we will continue our analysis regarding the mean compensation for PRM | FRM holders. (See previous blog for salary analysis of CFA Charter Holders)
As we pointed out in the previous post, the salary figures can vary dramatically based compensable factors such as employer size, industry, employee credentials, years of experience and others.
As per salary.com data, the average salary of Risk Manages in U.S is about $94,606 per annum. The pay range, however is quite wide and varies from $80,000 to $111,000:

Both PRMIA and GARP also provide a platform for their respective charter holders to help them avail some of the best job oportunities currently open in the market.

In the preceding post we talked about job as a financial analyst.
Today we discuss Risk Management as a career.
Overview Risk Management:
Within the financial services industry, risk management involves assessment and quantification of business risks, and then taking measures to control or reduce them.
Educational requirements:
To work in risk management, a bachelor’s degree is the bare minimum, often an MBA also is preferred. Strong quantitative skills are a must.Certifications like the PRM or FRM provide the necessary backing to your resume. A globally recognized certification program puts employees on the same footing. Organizations consider them as a means to ensure that everyone in particular job groups or functions has the same level of experience, knowledge, and ability.

Hi,
Greetings from Pristine!
PRM certification has generated huge interest among the students and market practitioners who wish to enhance their career opportunities in Risk Management. Being an authorized trainer for PRM certificate, we receive a lot of queries on regarding careers prospect in Risk Management and how to tackle the Exam. To resolve such queries, Pristine is conducting two hours seminars for the same. The seminar would be presented by Mr. Dinesh Chaudhary, who has a vast experience in Risk Management, has cleared PRM and holds an award of distinction for Top Score in PRM 2009 Exam.

(A) Why should I go for PRM?

Here goes the why-do-I-do-it list:
Global – Candidates from more than 80 countries are actively pursuing the PRM, more than any other risk certification program.
Endorsed by leading Universities and Businesses.
Predictive Power – Because the PRM is broken into four exams, each of which must be passed to attain the designation, you cannot use strength in one area, say Math or Finance, to cover weaknesses in other area, say Risk Management
But once you get through, it certainly adds to your credentials.

Why go for Financial Certifications

2010 FRM Exam Registration