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Sun Apr 06, 2014 8:11 am

What does lower bound and upper bound means ? Does option value means the premium amount or the exercise price ? Why is the upper bound of put option equal to exercise price ?

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Sat Apr 05, 2014 3:04 pm

Please explain the concepts of: i) Pipeline Risk ii) Contingent Risk iii) Wrong-way Risk

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Tue Apr 01, 2014 4:00 am

What is squaring off ? Can you please give an example for the same? And why is squaring off done ?

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Sun Mar 30, 2014 1:29 pm

will there be any differences in the cfa level 1 books for june attempt and for december attempt ?

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Sun Mar 30, 2014 1:26 pm

Why does bond value approaches par as the time to maturity comes nearer ?

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Sun Mar 30, 2014 1:26 pm

Why does bond value approaches par as the time to maturity comes nearer ?

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Fri Mar 28, 2014 12:09 pm

Hi, I am looking for a study partner for cfa level 1 . Please let me know if anyone's interested. my mail id is <!-- e --><a href="mailto:shruti_madani@yahoo.co.uk">shruti_madani@yahoo.co.uk</a><!-- e --> Shruti

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Wed Mar 26, 2014 1:04 pm

Can anyone explain VAR , Stress and Back testing taking an practical example in an excel sheet. The calculation OF VAR and difference between each test with an example ?

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Tue Mar 25, 2014 4:49 pm

Could you please explain Buy side(Front Office, Middle Office and Back-office)operations and sell side operations taking an practical example? what is the major Difference between Buy Side Firms and Sell Side Firms? Does Buy Sides...

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Sat Mar 15, 2014 7:23 pm

hi.. while i was going thru the recording session for CCRA in level 1 Financial Statements Analysis Session 4 in 9_IGAAP Vs IFRS Part 2 is not correct,the slide is not continued..please check it and upload it correctly..

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Sat Mar 15, 2014 11:48 am

PRM-I, Finance Theory âº Portfolio Mathematics at 22:00 in the example, written in the document: Var[4X-3Y] = 16*Var[X] + 9*Var[Y] + 2*4*(-3) * Var[X]^(1/2) * Var[Y]^(1/2) * correlation[X,Y] hand-written manually: Var[4X...

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Tue Mar 11, 2014 11:46 am

In order to calculate option value using Black Sholes, we need to calculate normal distribution value of D1 and D2. (CHAPTER 8 - Basic Principles of Option Pricing ) I am using TI-30XS calculator for practice. I could not find any...

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Mon Mar 10, 2014 10:17 am

I need to undeerstand this statement ' The insurance co. provides protection to a diversified pool of policy holders,whose risks of loss are typically uncorrelated. This provides more predictable losses and cash flows compared to ...

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Sun Mar 09, 2014 11:35 am

Pls explain below calculation : (2) Company EFG is a large derivative market-maker that has many contracts with counterparty JKL, some transacted in the same legal jurisdiction and others across different legal jurisdictions. As...

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Sat Mar 08, 2014 7:08 am

i have to give cfa level1 in november. How many readings from schwezer is required ? And by when should my first reading be completed so that i get time for practising questions ? please help and do tell the hours required for fir...

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Sat Mar 08, 2014 7:06 am

i have to give cfa level1 in november. How many readings from schwezer is required ? And by when should my first reading be completed so that i get time for practising questions ? please help and do tell the hours required for fir...

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Thu Mar 06, 2014 12:01 pm

60.1 Baselâs traffic-light market risk backtest (green/yellow/red zones) is a test of the NULL HYPOTHESIS that the bankâs internal 10-day 99% confident value at risk (VaR) model is accurate. Which of the following is most diff...

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Tue Mar 04, 2014 6:05 pm

303.1. Analyst Barry runs an short-term interest rate simulation using Tuckman's simple Model 1, which assumes no drift (zero drift) and is given by: The time step in his model is one month; i.e., dt = 1/12. His Model 1 also makes...

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Sun Mar 02, 2014 11:54 am

In currency option the Volatility become less pronounced as maturity of the option increases- Why is that Can anyone explain Source GARP core reading

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Sun Mar 02, 2014 8:20 am

21.1. Each of the following is SIMILAR to a RAINBOW option EXCEPT for: a. Option with payoff = MAX[Asset #1, Asset #2, Asset #3] b. US Treasury bond futures contract c. Credit default swap (CDS) with multiple deliverable obligatio...

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Sun Mar 02, 2014 7:43 am

The probability of being Asset price above Strike price of a call option is N(d2)-Can anybody explain this please. I know I have read somewhere but I can quite recollect it

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Sun Mar 02, 2014 5:33 am

Can anybody explain cliquet options with an example.

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Sat Mar 01, 2014 4:43 pm

The doubt is of economics regarding Interest rate parity(IRP). 1) why does IRP does not hold in short run? 2) why does uncovered IRP assumes that the investor is risk neutral? 3) In case of covered IRP , why does bank quote differ...

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Mon Feb 24, 2014 6:40 am

Quiz 2:ORM Banks have to meet a number of qualitative criteria before they are permitted to use a models-based approach. The qualitative criteria include: Choose one answer. Select one: a. The bank should have an independent risk...

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Tue Feb 18, 2014 8:44 am

(i) A 6 month American put option (ii) So= 50 (iii) X=52 (iv) Volatility=20% (v)The stock price has a 80% probability to go up each period and a 20% probability of going down each period (vi) Risk free rate=12% p.a. How do we ca...

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Fri Feb 14, 2014 4:59 pm

Three traders, Amit, Balram and Chandok play a game of dice. Whoever throws a "6" first wins the game. Amit starts the game. What is the probability of Amit winning the game? Choose one answer. a. 36/91 Correct b. ...

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Sun Feb 02, 2014 4:32 pm

For a lognormal variable X, we know that ln(X) has a normal distribution with a mean of zero and a standard deviation of 0.5. What are the expected value and and the variance of X? Choose one answer. a. 1.025 and 0.187 Incorrec...

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Sun Feb 02, 2014 2:35 pm

The distribution of 1-year returns for a portfolio of securities is normally distributed with an expected value of 45 million, and a standard deviation of 16 million. What is the probability that the value of the portfolio, 1 year...

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Sun Feb 02, 2014 2:05 pm

An option trader is pricing a 1-year option. He is quoted an interest rate of 6% with semiannual compounding. In order to price the option correctly, he must convert this rate to a continuously compounded rate. Calculate the conti...

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Thu Jan 30, 2014 1:31 pm

Sovereign ratings will be the ceiling for the ratings of an issuer within that country. So does that mean, if the Sovereign rating for a country is BBB, the corporate bond cannot be given a rating above BBB?

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Wed Jan 29, 2014 9:46 am

Q. if a 10 % increase in sales causes EPS to increase from $1.00 to $1.50 and if the firm uses no debt,then what is the degree of operating leverage ? please give the answer in detail because its confusing

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Wed Jan 22, 2014 5:30 am

Why is the covariance between the returns of a stock and a put option on the stock negative?

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Sun Jan 12, 2014 12:54 pm

'All assets with the same Beta should earn the same return'. So does that mean, irrespective of what the price of the asset is and irrespective of other factors, if two assets have the same beta, they earn the same return?

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Sat Jan 04, 2014 3:25 pm

Why is Leverage Ratio important and How does it help in evaluating the Defaulting Risk of the Firm ? ANd what do we mean by Deferred Tax Liability and Deferred Tax Asset ?

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Fri Jan 03, 2014 3:42 am

Still have some confusion. So please clarify the following :- How to calculate NOI? What is considered to be NOI from the following? 1. EBITDA 2. EBIT or 3. EBIT (1-t) Total Debt Service :- Does it consider only interest payment...

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Thu Jan 02, 2014 3:41 am

Need clarity to calculate Debt service coverage ratio. Please explain Net Operating income and Total Debt Service with example.

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Sat Dec 28, 2013 3:38 am

Please explain in detail about debt service coverage ratio and fixed charge coverage ratio with formula and example

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Thu Dec 12, 2013 6:56 am

If Hessian matrix is negative definite, it indicates Local maxima or Local minima ?

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Tue Dec 03, 2013 9:23 am

If some one has a Investment Banking pitch book - Please share. I am particularly looking for ECM Pitch Book. If ECM pitch is not available, any IB pitch book is fine. Thank You

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Fri Nov 29, 2013 7:11 am

Pls help me to solve the following equation : What is the sum of the Eigen values of the matrix ? 7 -3 5 2 a) 8 b) 5 c) 9 d) 7 Answer: Option âcâ For any matrix A, Characteristics equation is given by, (A - Î»I) = 0 S...

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Thu Nov 28, 2013 5:34 am

Hologram is a fast growing restaurant chain. Its company is growing 7% YoY and the company had last paid out a dividend of 5$. The share is currently trading for 52.35$ at NYSE. The company plans to raise further capital from the ...

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Thu Nov 28, 2013 4:47 am

Quick InfoTech reports its financial statements as follows: Net Income: $53 million Increase in accounts receivable: $ 0.66 million Increase in accounts payable: $1.3 million Increase in inventory: $2 million Amortization: $4.3 mi...

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Wed Nov 27, 2013 3:33 pm

Can anyone explain me how to calculate normalized eigenvector. Thanks

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Sun Nov 24, 2013 5:05 am

A 90-day T-Bill Future is quoted price at 98. Calculate the delivery price Choose one answer. a. $98 b. $980,000 c. $995,000 answer was given choice c without any explanation .help me out plz

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Sat Nov 23, 2013 1:38 am

asked in an interview by a rating agency. Formula to calculate working capital intensity

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Fri Nov 22, 2013 3:32 pm

In sentence 2 para 3 page 47 of FMP book (Garp core reading) it says that if the basis strengths (i.e., increases) unexpectedly, the hedger's position improves(in a short hedge); if the basis weakens (i.e.,decreases) unexpectedly,...

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Thu Nov 21, 2013 4:49 am

I am looking for detailed Pre money and Post money valuation in excel as a part of a Equity model. If someone has this - Please share. Thanks

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Wed Nov 20, 2013 1:14 am

what could be the cut off for passing the exam?

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Mon Nov 18, 2013 3:28 pm

On maturity of the futures contract, the Exchange informs the short position holder: a. What grade to deliver b. How much quantity to deliver c. Where to deliver d. Who to deliver it to This was one of the questions in the recent...

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Wed Nov 06, 2013 9:27 am

A European-style call spread consists of a long position in the 105 strike call and a short position in the 115 strike call both maturing in 18 months. The options are on a stock index with an annualized dividend yield of 1% per a...

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Wed Nov 06, 2013 6:29 am

A portfolio manager returns 10% with a volatility of 20%. The benchmark returns 8% with risk of 14%. The correlation between the two is 0.98. The risk-free rate is 3%. Which of the following statements is correct? Choose one answe...

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Sat Nov 02, 2013 8:31 pm

Following are the closing price (P) and yields(Y) of a particular liquid bond over the past few days: Monday: P= 106.3 Y= 4.25% Tuesday: P= 105.8 Y= 4.20% Wednesday: P= 106.1 Y= 4.23% What is the approximate duration of the ...

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Sat Nov 02, 2013 7:51 pm

In the 3 tier securitization structure there would be Senior tranch, mezanine tranch & equity tranch. Suppose there are enough cash-flow received (say A) from the underline security to pay off the interest to Senior (B) &...

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Fri Oct 25, 2013 4:24 pm

Is my understanding CLN is correct? I have understood the following steps for creating CLN: 1. Investor A purchases Bond & purchases CDS for protection from default risk. 2. CDS seller B sales CDS to Investor A & gets regu...

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Fri Oct 25, 2013 10:55 am

âwhat is the difference between cash future price and quoted future price

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Sun Oct 20, 2013 6:01 pm

Can u please explain how to convert a non-recombining tree to a recombining tree under Vasicek Model??

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Sat Oct 19, 2013 6:34 am

What percent of total DCF value is usually in the Terminal Value? What proportion did the Terminal Value contribute to the Enterprise Value? Why? What concerns are there?

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Thu Oct 17, 2013 11:28 am

Company ABC was incorporated on January 1, 2004. it has expected annual default rate of 10%. Assuming a constant quarterly default rate, what is the probability that company ABC will not have defaulted by April 1, 2004? a. 97.4%...

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Wed Oct 16, 2013 11:54 am

If the current USD/AUD rate is 0.6650 (1 AUD=0.6650USD) and the risk-free rates for the USD and AUD are 1.0% and 4.5% respectively, what is the lower bound of a 5-month European put option on the AUD with a strike price of 0.6880?...

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Wed Oct 16, 2013 11:46 am

An option portfolio exhibits high unfavorable sensitivity to increases in implied volatility and while experiencing significant daily losses with the passage of time. Which strategy would the trader most likely employ to hedge his...

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Wed Oct 16, 2013 5:43 am

While analyzing a portfolio an analyst found that the beta of the portfolio was high at 1.15. The portfolio had an expected return of 13.6% and had standard deviation of 16.4%. The portfolio was benchmarked against the Sensex whic...

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Wed Oct 16, 2013 5:40 am

Marks: 1 Assume that a portfolio underperformed its benchmark by 2% in the most recent month. In this scenario, Choose one answer. a. Alpha may be positive or negative depending upon Beta of the portfolio. Correct b. Alpha i...

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Wed Oct 16, 2013 5:39 am

ello everyone I am a bit confused on Yield curve and effects on bonds(zero,par and coupon) Can anybody please explain ... or direct me which material to refer so that I can understand

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Mon Oct 14, 2013 12:33 pm

Which of the following statements is the least accurate about the foundation IRB and the advanced IRB approaches for credit risk capital charge in the Basel II? Select one: a. EAD, and correlation coefficient, within the risk-wei...

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Fri Oct 11, 2013 8:07 am

Company EFG is a large derivative market-maker that has many contracts with counterparty JKL, some transacted in the same legal jurisdiction and others across different legal jurisdictions. As a result, EFG has some contracts with...

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Thu Oct 10, 2013 11:23 am

What is the daily portfolio VaR at 97.5% confidence level? â¢Investment in asset A is Rs. 40 mn â¢Investment in asset B is Rs. 60 mn â¢Volatility of asset A is 5.5% and asset B is 4.25% â¢Portfolio VaR if correlation between A...

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Thu Oct 10, 2013 11:03 am

For an uncorrelated portfolio what is the VaR if: â¢VaR asset A is $10 mn â¢VaR asset B is $20 mn The answer has been given as $22.36 mn at one place and $ 11.18 mn at other place (in the other place they have assumed equa...

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Wed Oct 09, 2013 10:53 am

What assumptions does a duration-based hedging scheme make about the way in which interest rates move? I. A small parallel shift occurs in the yield curve. II.Interest rates movements are highly correlated. III. Any parallel shi...

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Wed Oct 09, 2013 2:40 am

You are hired as the credit risk manager for a large bank. You find that the bankâs credits are poorly diversified. The bank has an extremely large exposure to one firm with a BB rating. All its other loans have the equivalent o...

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Tue Oct 08, 2013 12:20 pm

An analyst has compiled the following information on a portfolio: Sortino Ratio: 0.82 Beta: 1.15 Expected return: 12.2% Standard deviation: 16.4% Benchmark return: 11.9% Risk-free rate: 4.75% Calculate the mean squared deviation o...

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Tue Oct 08, 2013 11:46 am

A bank cr officer, who has reviewed a loan application, has made the following statement:âOn a stand alone basis, I was not very keen on granting this loan however, I granted this loan after looking at the overall asset portfoli...

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Tue Oct 08, 2013 11:43 am

If the top management of a large firm finds that the overall risk of the firm's portfolios has changed, which of the following would NOT be a likely reason? Choose one answer. a. Many of the managers have unknowingly made very d...

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Tue Oct 08, 2013 5:28 am

Manoj says that Beta in CAPM has the following properties- I. Beta varies between +3 and -3 II.Any security with a zero beta is risk-free III.A negative beta might occur even when both the benchmark index and the stock under consi...

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Tue Oct 08, 2013 5:25 am

Last 4 years, the returns on a portfolio were 6%, 9%, 4%, & 12%. The returns of the benchmark were 7%, 10%, 4%, & 10%. The minimum acceptable return is 7%. What is the portfolio's Sortino ratio? Choose one answer. a. 0.4...

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Tue Oct 08, 2013 1:46 am

If risk is defined as a potential for unexpected loss, which factors contribute to the risk of a long put option position? Choose one answer. Choose one answer. a. Delta, vega, rho Correct b. Vega, rho Incorrect c. Delta...

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Tue Oct 08, 2013 1:42 am

An option portfolio exhibits high unfavorable sensitivity to increases in implied volatility and while experiencing significant daily losses with the passage of time. Which strategy would the trader most likely employ to hedge his...

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116 |

Wed Oct 02, 2013 11:57 am

Hi, In Test 2 of Market Risk about 99% of the question are from Part 1 regarding pricing of option by using Put Call Parity, FRA, SWAP etc & hardly one question from Volatility smiles. So is there is any chance of getting such...

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Sun Sep 29, 2013 7:24 am

(1) The Westover Fund is a portfolio consisting of 42% fixed-income investments and 58% equity investments. The manager of the Westover Fund recently estimated that the annual VAR (5%), assuming a 250-day year, for the entire port...

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Fri Sep 27, 2013 6:54 am

How to calculate marginal EC in example mentioned in Capital allocation pdf. It is given : Marginal EC = 8100 / 101.73 How to calculate 8100 ?

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Tue Sep 24, 2013 9:53 am

Are the below formulas for Variance and Covariance true Ïxy=1/n*Æ©(X-Âµx)(Y-Âµy) =1/nÆ©XY â (ÂµX*ÂµY) Ï^2=1/n*Æ©(X-Âµ)^2=1/n*Æ©(X^2) - Âµ^2 Please advice on the last part of both formulas in perticular

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Fri Sep 13, 2013 7:38 am

The number of false fire alarms in a suburb of.Houston averages 2.1 per day.Find the probability that 4 false alarms will occur on a given day. Please tell me the steps in BA II Plus Professional calculator. I know the formula but...

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Thu Sep 12, 2013 9:28 am

The number of false fire alarms in a suburb of.Houston averages 2.1 per day.Find the probability that 4 false alarms will occur on a given day.

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Sun Sep 08, 2013 4:24 pm

I am fed up with the way your faculty is taking classes. My questions are not being answered on the forum, not by email and not even in the classes. Today i requested Mr. Vivek (faculty) to make me understand how to calculate e^x ...

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Sun Sep 08, 2013 7:50 am

In a two-position portfolio consisting of positions X and Y, it is found that the marginal VAR of X is greater than that of Y. Using this information, which of the following is most likely to be TRUE? Increasing the allocation to:...

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Sat Aug 31, 2013 1:46 pm

A $100 par bond that pays a semi-annual coupon with coupon rate of 6.0% settles on 5/31/2013 and matures in 1.5 years on 11/30/2104. The price of the bond is $107.44 as the six month forward rates are 0.5%, 1.0%, and 1.5%, where e...

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Sat Aug 31, 2013 11:59 am

Spot rate(1.5)=[(1/Discount factor^(1/3))-1] Can anyone explain this formula concept. i want to know why is it ^(1/3) and not 3

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Wed Aug 21, 2013 2:09 pm

Company incorporated on January 1, 2004. Expected annual default rate 10%.Assuming constant quarterly default rate, the probability that it will not default by April 1, 2004. In this question the way suggested in the slide is to r...

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Wed Aug 21, 2013 2:03 pm

Company incorporated on January 1, 2004. Expected annual default rate 10%.Assuming constant quarterly default rate, the probability that it will not default by April 1, 2004.

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Tue Aug 20, 2013 9:17 am

Given two random variables x and y, what is the variance of x given variance(y)=100, variance (4x-3y)=2700, and the correlation between x and y is 0.5? In the Webinar it was solved till 2700= 16Variance X+900- 120Standard Deviati...

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Fri Aug 16, 2013 9:18 am

Stock price 20, volatility=20%,RF=4%. Assume ATM options with one yr maturity. How to calculate initial cost and MAX potential loss of the straddle. Source Hull.10.05&06

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Tue Aug 13, 2013 7:28 am

i was reading something about expected losses and unexpeted losses and would appreciate it if you clarify this for me. i read that expected losses are those anticipated reduction in value of loans advanced to borrowers by a bank o...

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Thu Aug 08, 2013 1:39 am

How to access the webinars which are over? In the Webinars once i click on any of the webinar i am interested in, it takes to me fill up a form by giving my first and last name, emailid and mobile number. When i submit it, i just ...

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Thu Aug 08, 2013 1:12 am

When will the first free webinar on FRM part 1 be posted on your website?

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Mon Jul 29, 2013 1:10 pm

79.1 Assume a bank conducts a four-year (1,000 days) backtest of their 99% value at risk (VaR) model. The backtest is conducted at a 95% level of test confidence, such that the model is accepted ("accurate VaR model") if the numbe...

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Mon Jul 22, 2013 4:16 pm

Hello Everyone. I am not able to understand that : What's the Difference Between the BOOK VALUE and the INTRINSIC VALUE of a SECURITY......??? Would Welcome any answer.

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Tue Jul 16, 2013 5:44 pm

Suppose that a quiz consists of 10 true-false questions. A student has not studied for the exam and just randomly guesses the ans. What is the probability that the student will get atleast 3 questions correct? (a) 54.7% (b) 33.66...

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Tue Jul 16, 2013 5:40 pm

A credit risk manager of Esta bank is reviewing the credit risk of EUR 400000 loan to Kidco, which is a subsidiary of Pattern Inc. Assume that Kidco will default if Pattern Inc default but Pattern will not necessarily default if K...

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171 |

Fri Jul 12, 2013 12:07 am

can any one tell me what's CFA Planner. How it would be helpful to prepae the exams

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Fri Jul 12, 2013 12:06 am

I am very confused of when, where to start the syllabus.

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Tue Jul 09, 2013 3:34 am

Is the syllabus for December 2013 different to June 2013 CFA 1

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Wed Jul 03, 2013 9:01 am

When will the first mock test be held tentatively? I want to know this so that I can at least touch upon all the subjects before that.

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Mon Jul 01, 2013 5:53 pm

The following PDF files are not being opened : 1) FMP I, II, III & IV 2) VAR I & II 3)Quantitative Analysis I,II & III, 4) Foundation of Risk Management 5) New Readings Foundation of Risk Management When i open these ...

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224 |

Mon Jul 01, 2013 5:49 pm

The following PDF files are not being opened : 1) FMP I, II, III & IV 2) VAR I & II 3)Quantitative Analysis I,II & III, 4) Foundation of Risk Management 5) New Readings Foundation of Risk Management

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Fri Jun 28, 2013 10:04 am

Job Title: Analyst Structuring Location: Chennai Key Responsibilities: â¢ Perform credit analysis â¢ Prepare and structure debt investment proposals â¢ Assist in structuring transactions â¢ Prepare investment theses, credit...

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Mon Jun 24, 2013 8:01 am

Job Title: Analyst Firm: A Leading KPO Location: Pune Job description: â¢ Build end-to-end linked financial models from scratch or customize it based on the provided template. â¢ Increase the efficiency of the model by approp...

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521 |

Mon Jun 17, 2013 4:15 am

I've downloaded the Var I,Var II,however the files are not playing.Please assist.I've to study.

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Thu Jun 13, 2013 8:40 am

hi i have purchased your FRM 1 pro. after reviewing the notes i realised that there are no notes on the new topics. for example, i couldnt find any note on model risk , coskewness and cokurtosis. Nothing about key rates, informat...

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Wed May 29, 2013 6:39 pm

The question ask the probability of selecting a bond, but doesn't the answer give the probability of selecting a stock?

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Fri May 24, 2013 6:42 pm

Could someone assist in explaining the difference in calculation for Concept checker #3 and #5 in the 2013 Scheweser study session #6 on pages 119 and 120. The questions are both asking for total pension expense and make no disce...

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Fri May 17, 2013 5:58 pm

while i was going through 3rd video on FMP for FRM part 1, i experienced many problems to follow it as the topic on which speaker is speaking is completely different than what is there on screen. so kindly help me out for the same...

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203 |

Wed May 15, 2013 12:22 pm

Many questions in the mock exams have missing parts in the questions. in this way it is impossible to answer those questions. I tried different browser but the problem persist. Could you please fix it?

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Mon May 13, 2013 9:06 pm

Can you please provide us the answer key to the revision questions? Currently, the answers are provided only to the FMP revision questions?

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Sun May 12, 2013 10:00 pm

Consider two stocks A and B. Assume their annual returns are jointly normally distributed, the marginal distribution of each stock has mean 2% and standard deviation 10%, and the correlation is 0.9. What is the expected annual ret...

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Sun May 12, 2013 9:40 pm

The joint probability distribution of random variables X and Y is given by f(x,y) = kxy for x = 1, 2, 3, y = 1, 2, 3, and k is a positive constant. What is the probability that X + Y will exceed 5? Please explain

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Sun May 12, 2013 9:36 pm

A bond trader has bought a position in Treasury Bonds with a 4% annual coupon rate on February 15, 2015. The DV01 of the position is USD 80,000. The trader decides to hedge his interest rate risk with the 4.5% coupon rate Treasury...

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Sun May 12, 2013 9:35 pm

A portfolio manager has a bond position worth USD 100 million. The position has a modified duration of 8 years and a convexity of 150 years. Assume that the term structure is flat. By how much does the value of the position change...

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Sun May 12, 2013 9:33 pm

The price of a 3?year zero coupon government bond is 85.16. The price of a similar 40year bond is 79.81. What is the one-year implied forward rate from year 3 to year 4? Please help for solution with step and concept

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Fri May 10, 2013 8:31 am

There is one topic missing in the fixed income lecture II - VALUING MORTGAGE BACKED AND ASSET BACKED SECURITIES. . The lecturer was not able to complete all the topics on time. So, can you please provide me a recording of fixed in...

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Sun May 05, 2013 1:28 am

Hi, The links on the courseware do not point to the lecture for derivatives 1 and 2. Please resolve the issue.

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Sat May 04, 2013 4:46 pm

The L2 recordings for Financial Analysis and Reporting are not audible (Class number 3). There is some problem with the mike in the class. Please upload a new class for the same as soon as possible as the exam date is approaching ...

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Sat May 04, 2013 2:36 pm

How to approach the Exam- Any Strategies for completing the exam within the time. And also is there anything like Documents for the Exam . If so were can i find it.

1 |
273 |

Fri May 03, 2013 12:10 pm

Could I get any Basel ii consultative documents on scenario analysis for operational risk?

0 |
249 |

Fri May 03, 2013 8:08 am

Any payment to a factor of production consists of factor opportunity cost and economic rent. In the light of this statement, which of the following is most likely to be false? Choose one answer. a. For a perfectly elastic supply...

2 |
281 |

Thu May 02, 2013 4:22 pm

Hi, I have a very quick question. Will we have questions in the exam on the section basis. I mean 100 questions divided under sections as below: 1. Foundations - 20 questions 2. Quant - 20 questions 3. Products - 30 questions 4. V...

1 |
352 |

Wed May 01, 2013 4:35 pm

The recordings for FRA have not been updated since april, 2012. Can we assume that there has not been any changes in the syllabus from last year?

0 |
170 |

Tue Apr 30, 2013 7:26 pm

A normal distribution has a mean of 39 and a variance of 625. The area under the distribution between 50 and 75 equals ________. Choose one answer. a. 0.745 b. 0.319 c. 0.255 The correct answer is 0.255. First note...

1 |
205 |

Tue Apr 30, 2013 2:28 pm

Considering it is the topic with most weightage, and has a lot more material than the other books, why is there only one class for this section? Do you recommend I study from the CFA textbook or somewhere else, or is all the infor...

4 |
415 |

Sun Apr 28, 2013 5:11 pm

The recording of VAR-I is twice and not upadated, it shown oct-2012 date.

0 |
162 |

Sat Apr 27, 2013 3:51 pm

Hello, The PDF i found on FRM revision classes contain only questions . Were can i find answers for those questions . As you know all the questions are not discussed in class due to lack of time . The questions with answers would ...

0 |
194 |

Thu Apr 25, 2013 7:42 pm

Hi, Can we get answers for the VaR Revision pack?

1 |
164 |

Thu Apr 25, 2013 7:57 am

Where can I get the answer key to the revision questions for FMP and other topics?

1 |
277 |

0 |
192 |

Sat Apr 20, 2013 11:18 am

Question 10: Could someone explain why option a is correct and not option b? Question 15: Could you explain step-by-step how to work this problem? Why is the answer the marginal net tax effect of additional debt? Question 19: Ho...

2 |
269 |

Fri Apr 19, 2013 6:16 pm

Can ypu please upload a different video for Portfolio Management. The problem in the current video is that some part of it is cut and due to that at least 10 slides are missed. This happens when video is at 2:52:00. Please look in...

0 |
208 |

Thu Apr 18, 2013 11:50 pm

A dependent variable is regressed against three independent variables across 25 observations. The regression sum of squares is 119.25, and the total sum of squares is 294.45. The following are the estimated coefficient values and ...

1 |
184 |

Thu Apr 18, 2013 11:21 pm

Seventy-two monthly stock returns for a fund between 1997 and 2002 are regressed against the market return, measured by the Wilshire 5000, and two dummy variables. The fund changed managers on January 2, 2000. Dummy variable one i...

0 |
180 |

Thu Apr 18, 2013 9:30 pm

friend's cna any one please suggest how can prepare well for PRM exam better, as i have completed my entire set of material preparation once. please suggest more tip's prepare much better, and how to practice the problems, from wh...

0 |
163 |

Thu Apr 18, 2013 6:10 pm

Question 16)Which of the following statement is least accurate for a Top Down equity analysis Approach? Choose one answer. a. Most valuation models, after top down analysis, recommends the required returns on equity, rather than...

1 |
186 |

Thu Apr 18, 2013 5:10 pm

Properties of regression-It specifies that the dependent variable is a linear function of the parameters,but does not require that there is linearity in the variables .- Can anybody please explain the second part- i find it diffic...

1 |
215 |

Thu Apr 18, 2013 11:43 am

Question-"Consider the two projects below. The cash flows as well as the NPV and IRR for the two projects are given. For both projects, the required rate of return is 10 percent. Year Project 1 Project 2 Cash Flows ...

3 |
236 |

Tue Apr 16, 2013 10:00 am

Please explain how the combination of the long interest rate call option plus a short interest rate put option has a same pay off as a forward rate agreement ?

3 |
218 |

Mon Apr 15, 2013 4:56 pm

Could someone explain how to go about solving questions 5 and 18? Thanks

2 |
238 |

Mon Apr 15, 2013 2:21 pm

Accounting rules differentiate research and development activities from activities not considered research and development. Which one of the following is not considered a research and development activity? Choose one answer. a. ...

2 |
444 |

Tue Apr 09, 2013 4:27 pm

Which of the following statements regarding the covariance of rates of return is least accurate? A) It is a measure of the degree to which two variables move together over time. B) If the covariance is not positive, the rates of ...

1 |
237 |

Tue Apr 09, 2013 1:05 am

Which of the following statements is correct? Choose one answer. a. For hedging the short position in the underlying, appropriate position in the futures contract is long position b. For hedging the long position in the und...

1 |
339 |

Tue Apr 09, 2013 12:58 am

Consider the following Fx rates: What is the 3 months CHF/ZAR outright forward price? <!-- m --><a class="postlink" href="http://www.edupristine.com/infrastructure/file.php/53/03000001_51.png">http://www.edupristine.com/infrast...

0 |
188 |

Tue Apr 09, 2013 12:54 am

If USD/ZAR is quoted at 4.8920/30 and USD/JPY as 123.74/84, what is the rate at which you can buy JPY against ZAR? The rate at which JPY can be bought against ZAR is the bid rate for ZAR/JPY. Bid rate for this will be given by Bi...

0 |
180 |

Tue Apr 09, 2013 12:50 am

Spot GBP/USD is trading at 1.8500/10. The tom/next rate is quoted 10/5. How should I quote for value tomorrow? How to solve?

0 |
171 |

Tue Apr 09, 2013 12:39 am

A Treasury bill selling for $97,569 with 100 days to maturity and a face value of $100,000 should be quoted on a bank discount basis at: Since T-Bills are quoted on an actual/365 basis, I believe one should use 365/100 for calcul...

0 |
228 |

Sun Apr 07, 2013 12:37 am

Suppose current price of the stock is $20. What is the delta of the call option on the stock with strike price $20 if the price of the stock moves up to $22 with probability 60% and moves down to $18 with probability 40%? How to ...

1 |
190 |

Sun Apr 07, 2013 12:36 am

Suppose risk-free rate of interest is 5%, volatility of the stock price is 35% and each step of the binomial model is 0.1 years, what is the probability of up-movement at each step of the binomial model?

1 |
169 |

Sun Apr 07, 2013 12:35 am

if the no.of days to maturity in a Black Scholes Model question are given as, say, 41. Then what should be the denominator? 365 or 250 i.e. calender days or trading days to calculate the price of the option?

1 |
178 |

Sun Apr 07, 2013 12:34 am

Suppose strike price of the call option is Rs. 90 and current price is 90. A one-step binomial model is built to price the option. Suppose the price of the stock moves up to 94.5 with probability 0.6 and moves down to 85.71 with p...

1 |
226 |

Fri Apr 05, 2013 6:56 pm

The axiom of independence of choice states that "Our preference order between two lotteries should not be affected if these lotteries are part of the same wider range of possibilities" The question asked in Quiz 2 on Ris...

0 |
189 |

Thu Apr 04, 2013 3:29 pm

hi can you please provide me the FMP part I recording by Mr. samir.

1 |
176 |

Thu Apr 04, 2013 1:01 pm

It is mentioned that the formulas are for calculating confidence intervals for population mean, but why should we construct a confidence interval for the pop mean when it is already known? (See heading of slide). Also what is the ...

1 |
174 |

Wed Apr 03, 2013 5:05 pm

Are there topics not covered in any of the slides? what do you recommend I study, in addition to reading the slides? I ask this because there were a few questions posted in the slides at the end of each chapter, which dealt with t...

3 |
189 |

Wed Apr 03, 2013 5:03 pm

Shouldn't it be standard dev of A, the distribution with a lower peak, has lower standard dev than B?

0 |
57 |

Mon Apr 01, 2013 4:31 am

Based on the results in Exhibit 1, the 95 percent confidence interval for the sensitivity of banking equity index returns to NSE 50 is closest to: Choose one answer. a. 0.21 to 0.47. b. 0.26 to 0.47. c. 0.27 to 0.46. ...

1 |
261 |

Fri Mar 29, 2013 11:45 am

While dealing with a two-tailed test,given the sample mean and the sampling distribution ,the logic should be to see if the hypothesized mean is inside the confidence interval assuming the sample mean as the best estimate of the p...

1 |
224 |

Mon Mar 25, 2013 12:48 am

Consider the following analysis of variance (ANOVA) table: Source Sum of squares Degrees of freedom Mean square Regression 20 1 20 Error 80 40 2 Total 100 41 The F-statistic for the test of the fit of the model is cl...

1 |
228 |

Mon Mar 25, 2013 12:39 am

dependent variable is regressed against three independent variables across 25 observations. The regression sum of squares is 119.25, and the total sum of squares is 294.45. The following are the estimated coefficient values and st...

1 |
132 |

Sun Mar 24, 2013 2:36 pm

63 monthly stock returns for a fund between 1997 and 2002 are regressed against the market return, measured by the Wilshire 5000, and two dummy variables. The fund changed managers on January 2, 2000. Dummy variable one is equal t...

0 |
168 |

Sun Mar 24, 2013 2:01 pm

Which of the following statements regarding multicollinearity is FALSE? A) Multicollinearity may be present in any regression model. B) Multicollinearity may be a problem even if the multicollinearity is not perfect. C) Multicoll...

1 |
173 |

Sun Mar 24, 2013 1:59 pm

A variable is regressed against three other variables, x, y, and z. Which of the following would NOT be an indication of multicollinearity? X is closely related to: A) 3y + 2z. B) 3. C) y2. D) 9y, and x is closely related to 4z. ...

1 |
159 |

Sat Mar 23, 2013 8:38 pm

please answer my fra questions as approx one month had passed since posted

0 |
429 |

Fri Mar 22, 2013 1:16 am

Which of the following statements regarding the coefficient of determination is least accurate? The coefficient of determination: A) may range from â1 to +1. B) is the percentage of the total variation in the dependent variable...

1 |
155 |

Thu Mar 21, 2013 10:48 pm

How to find discrete compounding rate from continious compounding rate? if continious compounding rate is 10.75% , semi annually. e 0.1075 = (1=r/2)2 please solve this step wise

1 |
175 |

Thu Mar 21, 2013 10:22 pm

The sample mean is an unbiased estimator of the population mean because the: A) sampling distribution of the sample mean has the smallest variance of any other unbiased estimators of the population mean. B) expected value of the ...

1 |
173 |

Thu Mar 21, 2013 2:01 am

The joint probability distribution of random variables X and Y is given by f(x,y) = kxy for x = 1, 2, 3, y = 1, 2, 3, and k is a positive constant. What is the probability that X + Y will exceed 5? Choose one answer. a. 1/4 ...

1 |
184 |

Wed Mar 20, 2013 4:36 pm

I followed recording on Tutorial for Time value of Money exactly guided by Pristine and I have replicates the steps accordingly for the questions solved by you in recordings in which first Answer is 965. something where i am getti...

1 |
161 |

Wed Mar 20, 2013 3:55 pm

pproximately 50 percent of all observations for a normally distributed random variable fall in the interval: A) Âµ Â± 0.67Ï B) Âµ Â± Ï C) Âµ Â± 2Ï D) Âµ Â± 3Ï If the ans i A . can u please explain

1 |
168 |

Wed Mar 20, 2013 1:39 am

For two (possibly dependent) random variables, X and Y, an upper bound on the covariance of X and Y is: A) 1. B) Ï(X) â¢ Ï(Y). C) there is no upper bound unless the variables are independent. D) zero. Can you please explain ...

1 |
163 |

Wed Mar 20, 2013 1:32 am

The correlation coefficient for two dependent random variables is equal to: A) the product of the standard deviations for the two random variables divided by the covariance. B) the covariance between the random variables divided ...

1 |
173 |

Wed Mar 20, 2013 1:27 am

Which model does not lend itself to correlation coefficient analysis? A) Y = X + 2. B) X = Y Ã 2. C) Y â X = 2. D) Y = X3. Can you please explain the answer

0 |
156 |

Tue Mar 19, 2013 4:20 pm

Can we say P(A|B) =P(B|A) and can you please explain the concept behind P(B) = [P(B|A) Ã P(A)] + [P(B|AC) Ã P(AC)]

1 |
150 |

Tue Mar 19, 2013 3:38 pm

A conditional expectation involves: A) determining the expected joint probability. B) calculating the conditional variance. C) estimating the skewness. D) refining a forecast because of the occurrence of some other event. Can yo...

1 |
155 |

Mon Mar 18, 2013 11:20 pm

Given the following portfolio of bonds: Bond Price Par amount held (in USD million) Modified duration (in this order the values are mentioned) A 101.43 3 2.36 B 84.89 5 4.13 C 121.87 8 6.27 What is the value of the portfoli...

1 |
206 |

Sun Mar 17, 2013 9:02 pm

Who are block Brokers? What do they do? Can any one please explain in detail?

1 |
309 |

Sat Mar 16, 2013 7:49 pm

Assume that the current 1-year forward exchange rate is 1.200 USD per EUR. An American bank pays 2.4% annual interest rate on a 1-year deposit and a 4.0% annual interest rate on a 3-year USD deposit. A European bank pays a 1.5% an...

1 |
186 |

Sat Mar 16, 2013 6:05 am

Suppose strike price of the call option is Rs. 90 and current price is 90. A one-step binomial model is built to price the option. Suppose the price of the stock moves up to 94.5 with probability 0.6 and moves down to 85.71 with p...

3 |
179 |

Sat Mar 16, 2013 5:59 am

Suppose current price of the stock is $20. What is the delta of the call option on the stock with strike price $20 if the price of the stock moves up to $22 with probability 60% and moves down to $18 with probability 40%? How to ...

1 |
148 |

Sat Mar 16, 2013 5:54 am

Suppose risk-free rate of interest is 5%, volatility of the stock price is 35% and each step of the binomial model is 0.1 years, what is the probability of up-movement at each step of the binomial model? In the soln, shouldn't it...

1 |
315 |

Sat Mar 16, 2013 2:29 am

A bank has sold $300,000 USD of call options on 100,000 equities. The equities trade at 50, the option strike price is 49, the maturity is in 3 months, volatility is 20%, and the interest rate is 5%. How does it the bank delta hed...

1 |
278 |

Sat Mar 16, 2013 1:14 am

The purpose of regression is to: A) explain the variation in the dependent variable. B) explain the variation in the independent variable. C) get the largest R2 possible. D) explain the mean of the independent variable. Can the ...

1 |
139 |

Fri Mar 15, 2013 3:27 pm

Please Explain "largest cash inflows (i.e., the best case) occur when the market is in backwardation and spot prices are rising. The worst cash-flow effects occur when the spot price is falling and the market is in contango....

1 |
155 |

Thu Mar 14, 2013 4:13 pm

A goal of an âinnocent until proven guiltyâ justice system is to place a higher priority on: A) avoiding type II errors. B) avoiding type III errors. C) avoiding type I errors. D) the null hypothesis. Is it (D) or (C) which ...

1 |
154 |

Thu Mar 14, 2013 3:15 pm

If the null hypothesis is innocence, then the statement âIt is better that the guilty go free, than the innocent are punishedâ is an example of preferring a: A) type I error over a type II error. B) two tailed test over a one...

1 |
234 |

Thu Mar 14, 2013 2:41 pm

A bottler of iced tea wishes to ensure that an average of 16 ounces of tea is in each bottle. In order to analyze the accuracy of the bottling process, a random sample of 150 bottles is taken. Using a t-distributed test statistic...

1 |
594 |

Thu Mar 14, 2013 12:52 am

Robert Patterson, an options trader, believes that the return on options trading is higher on Mondays than on other days. In order to test his theory, he formulates a null hypothesis. Which of the following would be an appropriate...

1 |
208 |

Tue Mar 12, 2013 9:48 pm

Hi all, Can anyone plz tell me how to solve the following equations in BA2 PLUS Calculator :- a+b+c = 1 1a+ 0.5b+ 1.3c = 1.3 1.5a+ 1b+ 1.1c =1.975

2 |
145 |

Tue Mar 12, 2013 5:24 pm

Lisamaria Traina, FRM is short a series of copper futures contracts. At present, copperâs carrying cost is greater than the convenience yield. What should Traina do? A) Deliver the contract at expiration. B) Deliver when future...

2 |
179 |

Tue Mar 12, 2013 4:14 pm

can anybody explain the concept of the formula (so*e^-qt--K*e^-rt) and why is R negative.

1 |
180 |

Sat Mar 09, 2013 11:44 am

I was reading but Greeks when this caught my attention: When the stock price increases, one should buy more stocks to make the portfolio delta neutral. In case it decreases, one should sell stocks. My idea is when the stock price ...

1 |
265 |

Thu Mar 07, 2013 4:54 pm

why the equity owners of bank,brokers, and other intermediaries absorb any loan losses before depositers and other banks ?

1 |
150 |

Thu Mar 07, 2013 9:31 am

Hello Sir i did not understand the concept of company comparables , and transaction comparables. Please tell me in detail what is these, How we search it and what is the final interpretation and analysis we pick from these analysi...

1 |
161 |

Wed Mar 06, 2013 11:13 pm

A joint probability of A and B must always be: A) greater than or equal to the conditional probability of A given B. B) greater than or equal to than the probability of A or B. C) less than or equal to the conditional probabil...

1 |
177 |

Wed Mar 06, 2013 11:12 pm

If the outcome of event A is not affected by event B, then events A and B are said to be: A) statistically independent. B) mutually exclusive. C) collectively exhaustive. D) conditionally dependent. Is {B} correct?

1 |
157 |

Wed Mar 06, 2013 11:07 pm

Dependent random variables are defined as variables where their joint probability is: A) equal to zero. B) greater than the product of their individual probabilities. C) equal to the product of their individual probabilities. ...

1 |
181 |

Mon Feb 25, 2013 8:43 pm

Q1. If any asset is sold at profit in a given year, lets say any machinery is sold at profit of rs 200000, in F/Y 2011-12 then how does it affect financial statements, B/S, P/L and CF. According to my understanding, if any asset i...

1 |
182 |

Fri Feb 22, 2013 10:22 pm

Sir/Madam i have search on google for frm handbook by philippe jorion and Scheweser Notes. Frm handbooks 6th edition is costly Rs.9209. and i cannot search Scheweser Notes zeroxe.I have not purchase core reading by GARP,if I will ...

1 |
225 |

Thu Feb 21, 2013 11:17 pm

I am Unable to download the FMP recordings especiallyMEETING SOFTWARE even after installing the GOTO so please lemme know of what to do or provide me with the material which contains recordings

1 |
267 |

Wed Feb 20, 2013 11:53 am

Only pristine materilas is not enough to clear exam? FRM core reading books i have not purchased,is it must to purchase? the zeroxe copy can provided from your side?and i want to know from where i can buy BA Plus II professional c...

1 |
183 |

Tue Feb 19, 2013 10:41 am

Hi, this is mohit from delhi batch started from 3rd of Feb.2013, guys i could not attend first 4 session of classes due to my tight schedule can anyone help me about the topics discussed in these classes. it would be a great hel...

0 |
253 |

Fri Feb 15, 2013 11:43 am

Is there any one from Bangalore who is preparing for CFA Level 1 ?

0 |
282 |

1 |
164 |

Wed Feb 13, 2013 3:26 pm

The current ratio of a firm is 1.5. If the firm decides to pay off 10% of its creditors, how would if impact the current ratio? A. Increase B. Decrease C. No Impact

3 |
280 |

1 |
314 |

Tue Feb 12, 2013 3:12 pm

Consider a stock with an intial price of $100. Its price 1 year from now is given by S=100*exp(r), where the rate of return r is normally distributed with a mean of 0.1 and standard deviation of 0.2. With 95% confidence, after rou...

0 |
198 |

Fri Feb 08, 2013 10:22 am

Q1. A firm issues a $10 million bond with a 6% coupon rate, 4 year maturity, and annual interest payments when market interest rates are 7%. If the market rate changes to 8% and the bonds are carried at amortized cost, the book v...

3 |
1158 |

Wed Feb 06, 2013 7:35 pm

Q1 under duties to employers, it is stated that â the codes and standards do not prohibit former employees from contacting clients of their previous firms, in the absence of noncompeting agreementâ Query: from the above state...

0 |
240 |

Tue Feb 05, 2013 11:08 am

IN MY LOGIN ACCOUNT IN CFA L1,,FSA 4TH PDF FILE IS SAME AS 3RD PDF FILE AND ONLY TILL READING 31 I.E. INCOME TAX IT IS COVERED. PDF 4TH FILE CONTAINING READING 32 TILL READING 35 TOPICS IS MISSING. PLZ UPDATE THAT PDF FILE AS GOT ...

1 |
149 |

Mon Feb 04, 2013 2:24 pm

Difference between reinvestment risk and price risk in terms of zero coupon bond and coupon bond?

1 |
324 |

Fri Feb 01, 2013 8:01 am

Hello, what is the difference between equity accounted investment and other equity investment?

1 |
146 |

Wed Jan 30, 2013 7:52 pm

How option prices are more volatile than the prices of underlying stock?

1 |
163 |

1 |
143 |

0 |
182 |

Wed Jan 30, 2013 10:41 am

calculation of diluted eps. for 8 qn in slide no 30 of fsa II answer is specified in slide no 32. there in the calculation of denominator its mentioned as (100-(100*50/75)). 100 is warrants 75 is avg price but how did we get 50...

1 |
196 |

Tue Jan 29, 2013 6:44 pm

Is it sufficient to read only schweser note and material given by the pristine for FRM?

1 |
222 |

Tue Jan 29, 2013 2:05 pm

Q. The euro currently trades at $1.0231. The dollar risk-free rate is 4 percent, and the euro risk-free rate is 5 percent. Six-month forward contracts are quoted at a rate of $1.0225. Indicate how you might earn a risk-free profit...

2 |
377 |

Wed Jan 23, 2013 7:36 am

If stock price is increase, why put option 's value will decrease? Lower bound of American call option is (S-K)/(1+r)powert, why? What does lower and upper bound define in case of Call and put options?

1 |
147 |

Tue Jan 22, 2013 4:43 pm

In the case study related to fmcg sector by pristine of "RCPL" (day II- IV ,VALUATION) ,we have calculated the interest expense in the debt schedule sheet by first calculating the average loan outstanding . Can there be...

1 |
163 |

Mon Jan 21, 2013 3:37 pm

Q. Company ABC purchased a 5% annual coupon bond, 10 years maturity, with a face value of $100 and market value $100,000 on Dec 31 2011. The market value on purchase is $100. On March 31 2012, its YTM is 6% and it is to be reporte...

1 |
136 |

Mon Jan 21, 2013 3:31 pm

Q1. An item should be recognized in its financial element if future economic benefit from item is probable. Query: what is meant by probable and what is the difference between probable economic benefit and possible economic benef...

3 |
221 |

Mon Jan 21, 2013 3:24 pm

Q1. An item should be recognized in its financial element if future economic benefit from item is probable. what is meant by probable and what is the difference between probable economic benefit and possible economic benefit Q2. ...

0 |
158 |

Tue Jan 15, 2013 5:45 pm

Has anyone worked on PPP based Financial Model...? If so then pls share the process of making one..

1 |
285 |

Sat Jan 12, 2013 11:43 am

Q1. PLEASE EXPLAIN THE FOLLOWING STATEMENTS : a) when regulators force monopolists to follow marginal price, price is fixed where MC curve intersects demand curve b) when regulators force monopolists to follow average cost price,...

2 |
222 |

Fri Jan 11, 2013 12:10 pm

Hello Everyone, This is Megha. Is there anyone appearing for CFA level I this June from Hyderabad?

0 |
346 |

Thu Jan 10, 2013 9:14 pm

Hi Sameer, I have a question from this recording. 1. There is a calculation at the begining of the ppt on compounding; annual, quarterly and monthly. I did not understanding the concept. Can you please explain this in detail. als...

1 |
625 |

Thu Jan 10, 2013 3:04 pm

Q1. Given output of 500 units at total cost of $2,000, fixed cost of $1000 and marginal costs of $2 and market price of $2, to achieve optimum output, a firm operating in perfect competitive markets should A. Not change its output...

4 |
264 |

Sun Jan 06, 2013 10:43 am

Can anyone provide me the sample papers for financial modelling exam conducted by IIM.These sample papers will assist us in getting an idea about the type of questions that might be asked in the exam.

1 |
385 |

Tue Jan 01, 2013 12:05 pm

Can anyone tell on how to go for the CFA L2 preparations.

4 |
469 |

Thu Dec 27, 2012 5:13 pm

Hi, I just wanted to confirm whether Forex quotation USD:GBP still is in our course or has this been stopped. Please confirm. Regards, Avinash

2 |
464 |

Sat Dec 22, 2012 12:55 pm

Hi all, I have just registered with Pristine , for PRM Exam1 Can you please advise me on how to start off with the preparation . Thanks

3 |
738 |

Wed Dec 19, 2012 10:16 pm

1)In a given portfolio, half of the stocks have a beta greater than one. Of those with a beta greater than one, a third are in a computer-related business. What is the probability of a randomly drawn stock from the portfolio havin...

1 |
551 |

Wed Dec 19, 2012 12:09 am

Given the following table about employees of a company based on whether they are smokers or nonsmokers and whether or not they suffer from any allergies, what is the probability of both suffering from allergies and not suffering f...

2 |
402 |

Tue Dec 18, 2012 10:59 pm

Mital Tieneâs investment portfolio currently consists of stocks in two companies, 40% in Drysdahl Banking and the remaining amount in Clampett Oil. Performance measurement information for these two stocks is given in the table b...

1 |
315 |

Thu Dec 13, 2012 9:40 pm

Hello friends, please help me out.....i have just started PRM course and i have checked on google that "PRM handbook" is the best study material for preparing PRM exams( I to IV)...but i could't find this PRM handbook in...

0 |
681 |

Thu Dec 13, 2012 3:25 pm

I have a particular range on numbers, say for example 1 to 10 I want to have such formula such that, i can get top 3 numbers i.e Maximum 3 numbers, i.e result would be 10, 9, 8.... I can not use sort or Filter because the populat...

1 |
254 |

Thu Dec 13, 2012 6:45 am

Hi, Can someone pls share the solutions to the below questions from Corporate Finance. 1. BackInSoon, Inc., has estimated that a proposed project's 10-year annual net cash benefit, received each year end, will be $2,500 with an...

1 |
360 |

Thu Dec 13, 2012 5:33 am

I have gone through both the videos on usage of financial calculator. Although I have understood everything that was explained in the video, I have the below doubt on the calculation of NFV, PB and DPB. When I used the down/up ar...

1 |
427 |

Mon Dec 10, 2012 7:07 pm

How to make financial model for banks? Banks financials are entirely different from that of normal companies. In the case of Banks; Balance Sheet is very important (Equivalent to CF statement in the normal companies).

1 |
407 |

Mon Dec 10, 2012 7:05 pm

Suppose I've prepared a Financial Model of a company valuation based on DCF model; I've pojected five years' (say FY13 to FY17) cash flow and then calculated terminal value. Now suppose current financial year's (FY13) results get ...

1 |
612 |

Tue Dec 04, 2012 11:24 am

Hello, I have registered for CFA Level 1 June 2013 exam. Iam MBA (Finance) and working full time. taking note of the above, can anyone guide me regarding how to start preparing for Level 1?

2 |
924 |

Sat Dec 01, 2012 9:33 pm

I am trying to create a powerpoint presentation. All the text to be shown in the slide body is added to the word document embedded to the slide. I want to add a text to the word document object, eg. the company's name, such that ...

0 |
348 |

Thu Nov 29, 2012 2:42 pm

Close End Mutual Funds are normally traded at 1 Dis to NAV 2.Premium

4 |
428 |

Thu Nov 29, 2012 1:58 pm

Q. The issue of differences in accounting conservatism between companies is best addressed when companies are compared using which of the following ratios? A. Price-to-earnings B. Price-to-cash flow C. Price-to-book value Quer...

2 |
417 |

Thu Nov 29, 2012 1:38 pm

As stated in answer to one of your questions related to speculative stock: "A speculative stock is substantially overvalued and sells at an extremely high P/E ratio, just like intrinsic value of stock which came out to at 44...

2 |
361 |

Wed Nov 28, 2012 1:42 am

Hi Can somebody explain the calculation here for expected mean? Mamta Gandhi, has following return-probability profile for three stocks. What is the expected rate of return and standard variation from his portfolio given equal we...

2 |
429 |

Tue Nov 27, 2012 2:29 pm

when we are deducting the interest expenses on bond from the net income for the purpose of cfo calculation, then what amount we will consider coupon payment or interest expense(excluding o including amortization of premium o disco...

1 |
347 |

Mon Nov 26, 2012 6:18 pm

Which of the following conditions is most likely to indicate that barriers to entry into an industry are low? A) The industry has significant economies of scale. B) Market shares have been stable over the last two business c...

1 |
357 |

Sun Nov 25, 2012 1:30 am

An investor buys a share of stock at $33 and simultaneously writes a 35 call for a premium of $3. What is the maximum gain and loss? Maximum Gain Maximum Loss A) $5 $30 B) unlimited -$33 C) $2 -$35 The correct answ...

2 |
420 |

Sun Nov 25, 2012 12:31 am

Consider a corporate bond with a yield of 6.8% and a municipal bond (with equivalent risk) with a 4.9% yield. Which of the following statements is most accurate? A) An investor with a marginal tax rate of 40% prefers the corpora...

2 |
342 |

Sat Nov 24, 2012 6:34 pm

What is GDR and ADR? is ADR means it can only be raise in usd and in usa,but GDR can be raised in any currency and in any country. Please if you can brief it.

2 |
376 |

Thu Nov 22, 2012 5:44 pm

Q The statement in P/E ratio fundamental comparison states âThe higher the level of debt, indicates that the company has higher risk and a higher required return on equity, which supports that the company having a lower P/E rat...

3 |
426 |

Thu Nov 22, 2012 3:38 pm

Can anyone suggest me what is the level of toughness in exam, Because today i have done cfa institue mocks and it is shocking?

1 |
471 |

Tue Nov 20, 2012 7:26 am

A feature unique to ETFs is their in-kind creation and redemption of shares,i didn't understand the meaning of in kind creation?

1 |
325 |

Mon Nov 19, 2012 1:35 pm

[color=#008000:3ize7c8c]Hi to all, do anybody share his/her experiance about the exam??? highlighting on difficulty level & epected probable cut-offs..??!!! Swarnendu[/color:3ize7c8c]

5 |
842 |

Sun Nov 18, 2012 12:34 am

what exactly do we mean by anomalies in market efficiency? plz explain the line " The bottom line for investors is that portfolio management based on time series data, cross sectional data and other anomalies will likely be ...

2 |
409 |

3 |
387 |

1 |
327 |

Fri Nov 16, 2012 3:02 pm

I have a query with finding the annual interest rate. In the questions the PV & FV are given & it is mentioned that it is compounded monthly, quarterly etc. e for period of x. The annual interest rate has to found out. Th...

1 |
343 |

Fri Nov 16, 2012 10:50 am

dear all i am facing the problem in prpearing cash flow and working capital . iahd doen the historiocal data and rati o analysis and i cant able to prepar ethe cash flow i here by attching the entire projections sheet whi...

2 |
2026 |

Fri Nov 16, 2012 10:35 am

Please let me know, What are the important modules in [b:3epbwewx]CFA level 1[/b:3epbwewx] - [color=#004000:3epbwewx][b:3epbwewx]economics [/b:3epbwewx][/color:3epbwewx]? so that i can concentrate more on them. thank you -Yogesh

1 |
386 |

Fri Nov 16, 2012 7:13 am

In case of cross hedging, -> the value of hedge ratio is high if the changes in stock prices of the two involved assets are highly correlated. Is the above statement true or false -Balaji

0 |
359 |

Fri Nov 16, 2012 6:32 am

200.1. You want to purchase 5,000 shares of a stock with the following real-time quote: bid $29.94 - ask $30.08 with bid-ask sizes of 3,000 shares (bid) and 10,000 shares (ask). The previous price close was $29.99. Which of the fo...

0 |
335 |

Thu Nov 15, 2012 9:10 pm

Please team pristine i request you to solve all query by tommorow morning As after tommorow morning i have to leave for mumbai.. So please.

0 |
344 |

Thu Nov 15, 2012 8:51 pm

An investment manager has USD 100mn to invest. He can choose either of three unknown stocks. One of the stocks will give him a return of 100% in 3 years. The other two stocks will give 0 returns in 4 years and 5 years respectively...

0 |
512 |

Thu Nov 15, 2012 8:38 pm

Bank has a cash position of 1M Euro. The Euro exchange rate is 0.95 USD/EUR. The one-day Euro exchange rate is normally distributed with mean 0.95 and standard deviation 0.01. Compute the one-day Value at Risk with 95% confidence ...

0 |
358 |

Thu Nov 15, 2012 8:31 pm

Estimating future volatility using historical data requires time to adjust to current changes in the market & hence implied volatility is an alternative method for the estimating future volatility. How is implied volatility in...

0 |
346 |

Thu Nov 15, 2012 5:56 pm

A Multi Year Restructuring Agreement for a $300 million loan with a sovereign has the following features: Maturity extended to five years Principal amortization for four years at 25% per year Grace period of 1 year Up-front fee =...

0 |
322 |

Thu Nov 15, 2012 5:06 pm

A fund manager has a portfolio worth $20 million with a beta of 1.2. The manager is concerned about the performance of the market over the next 2 months and plans to use 3-month futures contracts on the Nasdaq to hedge the risk. T...

0 |
326 |

Wed Nov 14, 2012 3:31 pm

An investor is holding a portfolio of 10 BBB-rated bonds. The probability that a bond will be defaulted is 0.25. The default between the bonds is independent. What is the probability that at least 4 bonds will not be defaulted? Ch...

1 |
341 |

Wed Nov 14, 2012 3:18 pm

Tinaâs portfolio has a large (negative) theta. She is planning to add a call option on a non dividend paying stock to her portfolio. She doesnât want the new option to change the overall theta of her portfolio by a large exten...

3 |
394 |

Wed Nov 14, 2012 12:16 pm

A path-dependent option is priced with a variable-node trinomial lattice. What should be done to reduce computational time without losing too much precision? Choose one answer. a. Set the model to binomial. b. Use same-leng...

1 |
302 |

Wed Nov 14, 2012 9:17 am

When would a Monte Carlo simulation be preferable to a historical simulation? A) Historical data does not produce favorable results. B) Insufficient computer capacity. C) A large amount of historical data is available. D) There i...

1 |
339 |

Wed Nov 14, 2012 8:53 am

Can someone try the below problem?? An American bank has a cash position of â¬1 million. The euro exchange rate is 0.95 USD/EUR. The 1-day euro exchange rate is normally distributed with mean 0.96 and standard deviation 0.01. Co...

0 |
317 |

Tue Nov 13, 2012 6:55 pm

An analyst collected the data for return given by the stock of Riflead ltd. for last 75 periods. He wanted to check the Kurtosis of the data relative to the normal distribution. The sum of the fourth power of deviation from the me...

2 |
378 |

Tue Nov 13, 2012 6:16 pm

Please any one tell me if in Hypothesis value of calculated t stat is equal to the t critical value then whether the null hypothesis should be rejected of fail to reject. and also tell me if sample size n=30 then Which distributio...

1 |
351 |

Tue Nov 13, 2012 1:39 pm

Hi Guys, I am new to this place, not sure how far the center is. Is anyone giving their exam from Bangalore?? Thanks, Balaji

0 |
398 |

Tue Nov 13, 2012 10:34 am

Steffy Williams is a fixed income portfolio manager which consists of option free government securities and corporate bonds. She predicts that short term interest rate will increase by 1% to 5.5% in next three months. But, she is ...

0 |
138 |

Mon Nov 12, 2012 6:09 pm

A bank will finance a 1 yr loan with a series of four 3- month eurodollar issues. the bank will hedge their financing risk in the eurodollar futures mkt. the hedge suffer from which of the following problem.. 1) Liquidity mismat...

3 |
332 |

Mon Nov 12, 2012 6:02 pm

Under which of the following condition VaR always increases.? A) When the level of confidance decreases B) When the mean of thhe return distribution is greater than 0. Ans is neither of them.. But In my understanding, A should b...

4 |
449 |

Mon Nov 12, 2012 5:59 pm

Early Excercise of an option is more likely for which of following.. A) American call option on stocks paying small Dividend B) American call option close to maturity. Please explain which one is right..?? In my oponion both are...

3 |
588 |

Mon Nov 12, 2012 2:10 pm

An FRA trader entered into an FRA agreement in which he will pay 6% (assuming quarterly compounding) between 3 months and 6 months. The principal for the trade is $3 million. The 6-month LIBOR spot rate is 5.80%. If trader had a g...

7 |
590 |

Mon Nov 12, 2012 12:52 pm

Hi all, I feel this Mock as bit lengthy & i was running short of time at some point.. what is the take of others.. about the lengthyness & difficulty level of the test...?? Swarnendu

0 |
315 |

Mon Nov 12, 2012 12:52 pm

A stock price is currently $50. Each month for the next two months it is expected to increase by 9% or reduce by 11%. The risk-free interest rate is 6.5%. Use a two-step tree to calculate the value of a derivative that pays off ma...

2 |
325 |

Mon Nov 12, 2012 12:47 pm

For the standard normal distribution, what is the value of P(-1.87 <= Z <= 1.23) or P(|Z| <= 1.6)? Choose one answer. a. 0.5683 b. 0.8794 c. 0.7831 d. 0.9145 how to calculate?

1 |
283 |

Sun Nov 11, 2012 6:21 pm

A Fixed Income Mutual Fund analyst collected the quarterly data for 5 year government securities returns for the 10 year period from 1999-2009. The variance for the data is 0.0210 and it is normally distributed. The analyst collec...

3 |
289 |

Sun Nov 11, 2012 5:35 pm

I am unable to follow the tax rate change example in the curriculum. Carrying value for 2006,2005 and 2004 are 14,000 ; 16,000 ; 18,000 respectively. Tax base for 2006,2005, and 2004 are 11,429 ; 14,286 ; 17,143 respectively D...

1 |
438 |

Sun Nov 11, 2012 12:38 pm

A bank has entered into a forward rate agreement to pay a fixed rate of 4.15 %( semiannually compounded) on $9 million between 6 and 9 months. If the LIBOR rates in 3 months, 6 months and 9 months are 5%, 4.5% and 3.5% respectivel...

1 |
319 |

Sun Nov 11, 2012 3:26 am

Can some one please explain how do we arrive at a duration of 7 years for this bond in the below question? Hong Kong Shanghi Bank has entered into a repurchase agreement with a client where the client will sell a 10-year treasury...

1 |
340 |

Sat Nov 10, 2012 11:07 pm

Consider a Treasury bond futures contract wherethe cheapest to deliver bond is a 10% coupon bond. The delivery is going to happen in 240 days. The last coupon date was 50 days ago, the next coupon date will be after 132 days and t...

1 |
341 |

Sat Nov 10, 2012 10:32 pm

A symmetric distribution with more that 5% of area under the curve falling beyondÂ±2standard deviations from the mean will be a platykurtic curve. Explaination given: In a normal curve, 5% of values fall beyond +,-1.96 std dev. ...

2 |
278 |

Sat Nov 10, 2012 8:31 pm

Roughly how many three-month LIBOR Eurodollar futures contracts are needed to hedge a position in a $200 million, 5-year receive-fixed swap? Choose one answer. a. Long 250 b. Short 3,200 c. Short 250 d. Short 40,0...

2 |
413 |

Sat Nov 10, 2012 7:34 pm

Can some one please answer the below with justification as in the quiz the answer provided is quite confusing and it mentions option 3 as well as option 4? The spot price of corn on April 10 is 207 cents/bushels. The futures pric...

1 |
285 |

Sat Nov 10, 2012 7:24 pm

A portfolio manager has USD 50 Million in the Trading Position with an income of USD 10 Million and 15% per annum volatility in returns. Calculate the per annum risk-adusted return at 95% confidence interval? Choose one answer. ...

0 |
303 |

Sat Nov 10, 2012 6:00 pm

If two securities have the same volatility and a correlation equal to -0.5, their minimum variance hedge ratio is Choose one answer. a. 4:1 b. 2:1 c. 16:1 d. 1:1 Hi, Can any one explain the concept. Thnx Nare...

1 |
295 |

Sat Nov 10, 2012 5:00 pm

What impact will a decrease in the risk-free interest rate have on the price of an American put option with the stock price and all other variables remaining the same? Choose one answer. a. No impact. Incorrect b. Negative. In...

2 |
329 |

Sat Nov 10, 2012 4:39 pm

[url:1veynrzf]http://www.edupristine.com/infrastructure/mod/quiz/review.php?q=2397&attempt=55195[/url:1veynrzf] in question 23 how to calculate this and why 2nd option and 4th option is not correct question...

1 |
288 |

Sat Nov 10, 2012 3:35 pm

John, a quantitative analyst at an Indian company IC Inc. needs to estimate the correlation of the sales of IC with its British counterpart BC Corp. John knows that the sale of both the companies depend only on the GDP of their re...

2 |
396 |

Sat Nov 10, 2012 3:05 pm

Question 1: When assessing the performance of a single investment fund, the asset allocation decision explains: A. a little less than 100% of the level of a fundâs returns. B. about 90% of the fundâs variation in returns ac...

3 |
850 |

Sat Nov 10, 2012 2:59 pm

I have scored 60% avg in all my Mock test. What does this score signify

1 |
232 |

Sat Nov 10, 2012 2:55 pm

Suppose that in a Treasury bond futures contract, it is known that the cheapest-to-deliver bond will be a 14% coupon bond with a conversion factor of 1.345. Suppose also that it is known that delivery will take place in 270 days. ...

2 |
571 |

Sat Nov 10, 2012 2:05 pm

In the equation for forecasting stock price Yt = .7Yt-1 + et + .6et-1 the correlation between Tuesdayâs price on Thursday of the same week is Choose one answer. a. 0.3 b. 0.49 c. 0.51 d. 0.7 How to solve th...

0 |
401 |

Sat Nov 10, 2012 10:46 am

11. Which of the following is most accurate with respect to Delta-Normal VaR? Choose at least one answer. a. The delta-normal method provides accurate estimates of VaR for options that are at-or-near-the money and close to expir...

1 |
319 |

Sat Nov 10, 2012 10:06 am

A.) Euro Dollar futures are designed to lose money if int rates rise. B.) FRAs are designed to gain money if int rates rise Which of the above is true?? Balaji

1 |
320 |

Sat Nov 10, 2012 2:44 am

Hi Everyone, The below is one of the question from Quiz 2 on Foundations of Risk Mgt. Can someone please justify how point III is correct in the below question? i.e. A negative beta might occur even when both the benchmark index a...

1 |
341 |

Fri Nov 09, 2012 10:36 pm

Suppose that the coupon and the modified duration of a 10 year bond priced to par is 6% and 7.5% respectively. What is the approximate modified duration of a 10 year inverse floater priced to par with a coupon of 18%-2*LIBOR (1 mo...

2 |
406 |

Fri Nov 09, 2012 6:00 pm

An investor purchases a call on a stock, with an exercise price of $60 and a premium of $2, and purchases a put option with the same maturity that has an exercise price of $65 and a premium of $1. Compute the payoff of a strangle ...

3 |
337 |

Fri Nov 09, 2012 5:11 pm

Consider a Forward Rate Agreement which receives a rate of 8%, annually compounded, on a premium of $100 between the end of year 1 and year 2. Find out the value of the FRA using the additional information provided in the followin...

3 |
326 |

Fri Nov 09, 2012 5:04 pm

An American call option with a life of 1 year has a strike price of $43 and the underlying stock is trading at $44. The volatility of the stock is 8%, the risk free interest rate is 5% and one time steps is 6-months long. Choose o...

2 |
383 |

Fri Nov 09, 2012 4:46 pm

Suppose there are two call options on the same stock which is trading at $40. The options are having strike prices of $40 (C40) and $45(C45). Suppose the volatility of the stock increases by 0.001. How will be the increase in the ...

1 |
293 |

Fri Nov 09, 2012 4:38 pm

A stock is trading at $55 and a put option on the stock has strike price of $50. If the stock price increases to $57 then which of the following is most likely change in the option price? Choose one answer. a. Increase by $0.40 ...

3 |
329 |

Fri Nov 09, 2012 3:18 pm

A portfolio consists of two zero coupon bonds, each with a current value of USD 10. The first bond has a modified duration of 1 year and the second has a modified duration of 9 years. The yield curve is flat and all yields are 5%....

1 |
298 |

Fri Nov 09, 2012 1:13 pm

Consider an American Call and a Put option of 4-months duration, written on an underlying stock currently priced at $40. The Strike price for the options is $35 and the risk-free rate is 4.5% (continuously compounded). Determine t...

3 |
333 |

Fri Nov 09, 2012 12:50 pm

hi, actually i have one doubt regarding the use of one tail and two tail distribution in relation with VaR. Actually in VaR que most of time they uses a one tail value and some times uses a two tail Z value. please some one can te...

1 |
293 |

Fri Nov 09, 2012 8:16 am

Roughly estimate the DV01 for a 2 * 5 CHF 100 million FRA in which a trader will pay fixed and receive floating rate. A. CHF 1,700 B. CHF (1,700) C. CHF 2,500 D. CHF (2,500) Ans given is C I reckon it should be 4 as the trader ...

3 |
578 |

Thu Nov 08, 2012 9:44 pm

A portfolio manager has USD 50 Million in the Trading Position with an income of USD 10 Million and 15% per annum volatility in returns. Calculate the per annum risk-adusted return at 95% confidence interval? Choose one answer. ...

1 |
310 |

Thu Nov 08, 2012 9:17 pm

Hello Sir / Madam, In the CFA DEC 2012 exam, 1. The questions will be asked Section wise right ? i.e Eco, Ethics, Fixed etc ? 2. Is there any time limit to answer sections ? Schweser Practice exams s...

1 |
386 |

Thu Nov 08, 2012 6:20 pm

Six straight lines and five circles intersect then the maximum possible number of distinct points of intersection is Choose one answer. a. 95 b. 80 c. 150 d. 120 plz solve this.

3 |
360 |

Thu Nov 08, 2012 6:17 pm

In the equation for forecasting stock price Yt = .7Yt-1 + et + .6et-1 the correlation between Tuesdayâs price on Thursday of the same week is Choose one answer. a. 0.3 b. 0.49 c. 0.51 d. 0.7 How to solve it..??

3 |
365 |

Thu Nov 08, 2012 6:12 pm

The current price of XYZ holdings Pvt. Ltd is $50. The annual standard deviation is 18%. The continuously compounded risk-free rate is 9.5% per year. Assume XYZ pays no dividends. Compute the value of a 1-year European call option...

4 |
369 |

Thu Nov 08, 2012 4:11 pm

Imagine a portfolio which holds two binary options, each with the same payoff and probability: USD -100 with a probability of 4% and USD 0 with a 96% probability. Assuming the underlying has uncorrelated returns, what is the VaR (...

1 |
303 |

Thu Nov 08, 2012 4:08 pm

In a two-position portfolio consisting of positions X and Y, it is found that the marginal VAR of X is greater than that of Y. Using this information, which of the following is most likely to be TRUE? Increasing the allocation to:...

2 |
289 |

Thu Nov 08, 2012 3:11 pm

Suppose you traded a FRA of value (approx.) $7165 for the period between 3 to 6 months on a principal of $1mn. The spot rate for 6 month LIBOR is 5% and FRA pays 10% (quarterly compounding). Find out 3 month LIBOR spot rate. Choos...

2 |
334 |

Thu Nov 08, 2012 1:34 pm

A 3-month American put option on a stock XYZ for strike price $40 is currently selling for $2.50. The stock itself is selling for $41. The risk free rate of interest is 7.5%. The 3-month American call option for strike price $41 w...

1 |
323 |

Thu Nov 08, 2012 12:52 pm

Hi, I am unable to download the pictures in the quizzes. Is there a setting? Is any one having the same issue? Thanks...

2 |
311 |

Thu Nov 08, 2012 9:30 am

Hi, small doubt... The FRA are used to be for 3 or 6 months for which we nedd to calculate the interest amount. So, is it mandatory to use interest rate with the same compounding frequency i.e. quarterly or half-yearly, even if th...

1 |
329 |

Thu Nov 08, 2012 9:20 am

A fund manager has a portfolio worth $10 million with a beta of 1.0. The manager is concerned about the performance of the market over the next 2 months and plans to use 3-month futures contracts on the Nasdaq to hedge the risk. T...

0 |
389 |

Wed Nov 07, 2012 8:30 pm

Moodyâs recently gave a rating of A to Dexter Incorporation and stated that the credit outlook is developing/evolving. What does this mean? Choose one answer. a. Dexter has still not been rated.[b:1xpgi4ea] Incorrect [/b:1xpgi4...

1 |
275 |

Wed Nov 07, 2012 8:26 pm

What would be the approx market risk capital requirement for a bank with a one- day VaR of $150 and a specific risk surcharge of $30, based on the currentBIS minimum capital requirements? Choose one answer. a. $564 Incorrect ...

1 |
4079 |

Wed Nov 07, 2012 3:33 pm

A 6-month American put option with a strike price of $42 has an underlying stock which is trading at $40. In 3 months the stock either moves up by 10% or down by 10%. The risk free interest rate is 6%. Determine the price of the o...

3 |
220 |

Wed Nov 07, 2012 3:32 pm

Calculate the value of a 1-year European call option using two step binomial tree. The underlying asset is trading at $50 and the strike price is $48. The risk free interest rate is 8%. The asset has a volatility of 10% and a divi...

4 |
256 |

Wed Nov 07, 2012 3:08 pm

Hi all, Is there is any difference between contango with normal Contango & backwardation with normal backwardation???? Swarnendu

3 |
241 |

Wed Nov 07, 2012 2:25 pm

The variance of the market portfolio is known to be 0.20, i.e. Sigmam2 = 0.20. Which of the following is/are true? I. A stock which has a variance of 0.05 gives lower returns than the market II. A stock which has a variance of 0....

3 |
289 |

Wed Nov 07, 2012 12:31 pm

From a pack of well shuffled cards, one card is drawn and kept aside. Then second card is drawn and then kept aside. After that first card (which was drawn first time) is kept back in the pack of cards, and then the third card is ...

2 |
205 |

Wed Nov 07, 2012 11:43 am

A fund manager has a portfolio worth $10 million with a beta of 1.0. The manager is concerned about the performance of the market over the next 2 months and plans to use 3-month futures contracts on the Nasdaq to hedge the risk. T...

0 |
210 |

Tue Nov 06, 2012 4:13 pm

The probability that an observation will lie within 3 standard deviation of the mean for any probability distributiona is atleast?? (a) .75 (b) .99 (c) .89 (d) .54 Please get me the process... Swarnendu

4 |
264 |

Tue Nov 06, 2012 3:25 pm

After analysis of an extraordinary portfolio held by extraordinary manager, following information have been identified. Expected return on Market Portfolio over risk-free rate: 10.52% Standard deviation of Market: 12.4% Correlati...

3 |
354 |

Tue Nov 06, 2012 1:38 pm

Actually i am facing a problem in solving the foreign exchange forward value.. At some time in solution they uses a continous discounting [ e^-(Rd-Rf)] and some time they simply uses a interest parity theorem([(1+Rd)/(1+Rf)]..even...

4 |
280 |

Tue Nov 06, 2012 11:26 am

An investor is long in a 2 year American Put option of Riverstone Ships. The up move factor is 1.23. The risk free rate is 3.5%. The current price for Riverstone Ships is $12. Which of the following is true based on one period bin...

2 |
228 |

Tue Nov 06, 2012 11:08 am

A bank has entered into a forward rate agreement to pay a fixed rate of 4.15 %( semiannually compounded) on $9 million between 6 and 9 months. If the LIBOR rates in 3 months, 6 months and 9 months are 5%, 4.5% and 3.5% respectivel...

9 |
526 |

Tue Nov 06, 2012 9:17 am

An investor has a short future contract on the stock of Glaceau Ltd. He entered into the contract at $90.Each contract has 25 stocks with a current market value of $2250. The initial margin for the contract was 800 and maintenance...

3 |
273 |

Tue Nov 06, 2012 8:27 am

Consider a position in a 5 year receive fixed swap that makes annual payments on a USD 100 million notional. The floating leg has just been reset. The term structure is flat at 5%, the Macaulay duration of a 5?year par bond is 4.5...

2 |
289 |

Tue Nov 06, 2012 8:13 am

Can someone try this?? It is June 2nd and a fund manager with USD 10 million invested in government bonds is concerned that interest rates will be highly volatile over the next three months. The manager decides to use the Septemb...

4 |
372 |

Tue Nov 06, 2012 8:02 am

A portfolio consists of two zero coupon bonds, each with a current value of USD 10. The first bond has a modified duration of 1 year and the second has a modified duration of 9 years. The yield curve is flat and all yields are 5%....

1 |
336 |

Mon Nov 05, 2012 6:34 pm

what is a mean of cash & carry arbitrage.. and inverse cash & carry arbritage.??

1 |
252 |

Mon Nov 05, 2012 3:52 pm

A common problem when determining margin between groups is agreeing upon a mark-to-market (MTM) value. Frequently, credit groups find that major discrepancies can be explained by differences in pricing of one or two trades. Which ...

2 |
232 |

Mon Nov 05, 2012 12:16 pm

Estimate the VaR of a 3x6 JPY 100 mn FRA. Assume that the extreme move for 3 month JPY LIBOR is 17bp & 6 months JPY LIBOR is 20 bp & correlation between 3 & 6 months rates is 0.95. (a) JPY 50000 (b) JPY 61000 (c) JPY 8...

3 |
261 |

Mon Nov 05, 2012 11:55 am

Hi, Just one query, can we get the rough sheet to do the calculations or we have to do everything in calc. or can we do it in the question paper itself??? Swarnendu

3 |
295 |

Mon Nov 05, 2012 11:27 am

In Garch formula what is the long term volatility and Avg Variance?? I reckon alpha0 or the 1st term is the Long term volatility and gamma is the Avg Variance. But I am finding different references in different materials. Can s...

3 |
357 |

Mon Nov 05, 2012 9:14 am

Hi Guys, Can someone try this problem? An investor is holding 10,000 shares of Shihaner which is trading $ 71. The put option on the same stock with a strike price of $70 has a delta of -0.47. The number of call option contracts...

7 |
419 |

Sun Nov 04, 2012 2:25 pm

A trader has an option position in crude oil with a delta of 100,000 barrels and gamma of minus 50,000 barrels per dollar move in price. Using the delta-gamma methodology, compute the VAR on this position, assuming the extreme mov...

2 |
266 |

Sun Nov 04, 2012 12:49 pm

A European-style call spread consists of a long position in the 105 strike call and a short position in the 115 strike call both maturing in 18 months. The options are on a stock index with an annualized dividend yield of 1% per a...

7 |
394 |

Sat Nov 03, 2012 9:53 pm

A bank has sold $300,000 USD of call options on 100,000 equities. The equities trade at 50, the option strike price is 49, the maturity is in 3 months, volatility is 20%, and the interest rate is 5%. How does it the bank delta hed...

2 |
229 |

Sat Nov 03, 2012 9:26 pm

Determine optimal weight ratio T.E vol ratio IR Manager A 5% 0.70 Manager B 5% 0.5 Benchmark 0 0 Portfolio 3% 0.82 Please explain ans.

6 |
358 |

Sat Nov 03, 2012 7:45 pm

can you please tell me how to calculate NPV on financial calc. e.g if we get $100 per year with a addition of 2% each year for 10 year then how to get the ans on financial calc. Disc @ 10% per annum.

4 |
306 |

Sat Nov 03, 2012 7:42 pm

please tell me, if we purchase a 200 call option contract each on 10 shares with time to maturity of 60 days and the delta of a option on 1 share is 0.5 then what action must take on underlying stock to hedge this..?? whether we ...

3 |
233 |

Sat Nov 03, 2012 4:57 pm

Hanwha Investment is underwriting a 30-year zero coupon corporate bond issue with a face value of $50 million and a current market value of $2,676,776 (a yield of 5% per six-month period). The firm must hold the bonds for a few da...

1 |
251 |

Sat Nov 03, 2012 12:53 pm

Consider a portfolio with a one-day VAR of $1 million. Assume that the market is trending with an autocorrelation of 0.1. Under this scenario, what would you expect the two-day VAR to be? Choose one answer. a. $2 million b....

4 |
271 |

Sat Nov 03, 2012 12:36 pm

The Westover Fund is a portfolio consisting of 42% fixed-income investments and 58% equity investments. The manager of the Westover Fund recently estimated that the annual VAR (5%), assuming a 250-day year, for the entire portfoli...

2 |
229 |

Sat Nov 03, 2012 11:33 am

In a [b:1uiop5ia]CDO, the SPV[/b:1uiop5ia] is typically AAA rated bond.. What is CDO and SPV in above sentence.

2 |
229 |

Sat Nov 03, 2012 11:31 am

Using the Merton Model, Value of Debt increases if all other parameter are fixed and 1) the value of firm decreases 2)riskless rate increases 3)Time to maturity increases 4) Volatility of firm decreases a.1 & 2 b.1 & 4 c...

3 |
248 |

Sat Nov 03, 2012 11:27 am

In a question it is given that, if credit you are considering has no systematic risk , In merton model, distance of default and EDF(expexted default frequency) are [b:14oxn0pf]-vly and non linearly related[/b:14oxn0pf]. bold wor...

1 |
559 |

Sat Nov 03, 2012 11:26 am

please explain me meaning of [b:xpe86lbl]inverse normal function[/b:xpe86lbl] and[b:xpe86lbl] inverse cumulative normal function[/b:xpe86lbl]..????

1 |
219 |

Sat Nov 03, 2012 2:07 am

A stock ha a annual expected return of 16% & annual volatility of 18%, What is the 95% VaR of this stock for one quarter??? (a) -15.5% (b) -10.85% (c) -16.25% (d) 18% Please state the formula to calculate the VaR... Swarnend...

4 |
325 |

Sat Nov 03, 2012 12:47 am

(A) Roughly what is the VaR of a CAD 100 mn with 10 year Canadian govt. bond if the extreme move for the 10-Year Canadian rate is 40 bp. (a) 3000000 (b) 7000000 (c) 100000000 (d) 70000 Please help...the correct answer mentioned i...

1 |
279 |

Sat Nov 03, 2012 12:28 am

At the beginning of the year, triple W corporation purchased a new piece of equipment to be used in its manufacturing operation. The cost of the equipment was $25,000. The equipment is expected to be used for 4 years and then sold...

2 |
295 |

Fri Nov 02, 2012 7:17 pm

please explain a concept of [b:da2eyhvh]surplus at risk[/b:da2eyhvh] and how to caculate VaR for it..??

2 |
245 |

Fri Nov 02, 2012 6:51 pm

[b:2bwszk4k]Question.[/b:2bwszk4k] Portfolio A has a 1-day, 95% VaR of $5 million. Portfolio B has a 1-day, 95% VaR of $7 million. Is it possible for the 1-day, 95% VaR of the combined portfolio (A + B) to be greater than $12 mill...

2 |
548 |

Fri Nov 02, 2012 4:56 pm

A large international benk has a trading book whose size depend on he oppertunities perceived by the traders. The market ris manager estimates the One-Day VaR, at 95% confidence level to be USD 50 million. You are asked to evaluat...

3 |
305 |

Fri Nov 02, 2012 12:12 pm

What is the Net Present Value of a yearly payment starting at 100 and increasing 2% yearly for 15 years, when the discount rate is 4%? Round to the nearest tenth. Choose one answer. a. 1120 b. 1260 c. 1470 d. 1620...

2 |
225 |

Fri Nov 02, 2012 11:37 am

A firm has just issued $1,000 face value bonds with a coupon rate of 8%, paid semi-annually, and a maturity of 15 years. If the issue price for this bond is $785.50, what is the yield-to-maturity, stated annually? Choose one answe...

3 |
296 |

Thu Nov 01, 2012 7:37 pm

Please tell me, What is mean by fungible.?? Actually in book it is given, I-strip is a fungible and p-strip is not.?? What is its mean.?? And also tell me what is difference between exercise price and strike price.?? it is given...

3 |
360 |

Thu Nov 01, 2012 2:40 pm

The delta-Normal method of VaR of an Option position tells us that as an option moves into the money, then (a) The VaR of a call falls & VaR of a Put rises. (b) The VaR of a call rises & VaR of a Put falls. (c) VaR of a b...

6 |
411 |

Thu Nov 01, 2012 2:07 pm

If the risk is defined as a potential for unexpected loss, then which factor contribute to the risks of a long put option position?? (a) Delta, vega, rho (b) Vega, rho (c) Delta, vega, gamma, rho (d) Delta, vega, gamm, theta rho....

4 |
308 |

Thu Nov 01, 2012 2:02 pm

I have encountered one article regarding Interest rates collar, but bit confused. I was under the impression that Interest rate collar can be created by two ways (a) Long CAP + Short FLOOR (b) Short CAP + Long FLOOR, but bit confu...

2 |
292 |

Thu Nov 01, 2012 1:54 pm

Hi Pristine, is Swapation is covered under the syllabus???? Swarnendy

1 |
253 |

Thu Nov 01, 2012 10:12 am

A lot of images related to questions are not visible in google chrome as well as in internet explorer. This problem is also present in several other quizzes as well. Please rectify at the earliest

1 |
237 |

Thu Nov 01, 2012 9:29 am

Kalpesh argues with Jayesh that the Sharpe Ratio and the Treynor ratio are similar with only some difference. He lists the following difference. I.Sharpe uses the standard deviation, Treynor uses beta II.S is more appropriate for...

3 |
286 |

Wed Oct 31, 2012 9:31 pm

Hi, Can we solve this question in any other way than normal one through Binomial model which is quite lengthy: Q. The stock price is currently $ 80. The stock price annual up move factor is 1.15. The risk free rate is 3.00%. The...

2 |
363 |

Wed Oct 31, 2012 10:24 am

The current price of the share of Company A is Rs. 100 & they pay no dividend. Interest rate is 6% p.a. (30/360), what is the approximate price of the perpetua call option with a strike price of Rs. 100 on 1 share of Company A...

1 |
196 |

Wed Oct 31, 2012 10:01 am

Hi Pristine, Can u please highlight the properties of Long/Short Gamma & Vega position & their implication to the option positions??? Swarnendu

1 |
195 |

Tue Oct 30, 2012 1:13 pm

The spot price of corn in April 10th is 207/bushels. The future price of the september contract is 241.5/bushels. If hedger are net short , which of the following statement is most acurate concerning the expected spot price of cor...

6 |
372 |

Tue Oct 30, 2012 12:04 pm

A European-style call spread consists of a long position in the 105 strike call and a short position in the 115 strike call both maturing in 18 months. The options are on a stock index with an annualized dividend yield of 1% per a...

2 |
251 |

Mon Oct 29, 2012 7:56 pm

Hi Could someone please help and explain how I should decide to long/ short Futures based on change in expected interest rate? Suddenly I am unable to work out the relation! <!-- s:shock: --><img src="{SMILIES_PATH}/icon_eek.gif"...

1 |
267 |

Mon Oct 29, 2012 7:22 pm

please explain me in brief, what is floater and inverse floater option..??

2 |
300 |

Mon Oct 29, 2012 6:15 pm

Q1. Acme corp has reported the following financial ratios for the past 2 years: [u:2gg9r2pp]net profit margin year 2010[/u:2gg9r2pp] - 14% [u:2gg9r2pp]financial leverage 2010[/u:2gg9r2pp] - 1.3 [u:2gg9r2pp]total asset turnover ...

4 |
457 |

Mon Oct 29, 2012 6:02 pm

<!-- m --><a class="postlink" href="http://www.edupristine.com">http://www.edupristine.com</a><!-- m --> Question 43 â FRM Sample Paper 2011 John is forecasting a stockâs price in 2011 conditional on the progress of certain le...

1 |
241 |

Mon Oct 29, 2012 4:03 pm

Hi, Just a meta issue, Just wanna to know, is the duration of a floater is always Zero???? & if so, is it due to reset of interest???? Please help.. Swarnendu

2 |
230 |

Mon Oct 29, 2012 2:47 pm

Suppose that coupon & modified duration of a 10-year bond prices to par is 6% & 7.5 respectively. What is the appropriate modified duration of a 10-year inverse floater priced to par with a coupon of 18%-2xLIBOR (1-Month)?...

8 |
3185 |

Mon Oct 29, 2012 12:56 pm

Please let me know, In FRM exam paper, whether question can be asked from outside the syllabus specified in Garp Core Reading?? Because in Garp Practice paper of 2008 there are lot of question are from outside the syllabus specifi...

1 |
273 |

Sun Oct 28, 2012 11:56 pm

Hi, A USD 1000 par corporate bond carries a coupon rate of 6%, pays coupon semiannually & has 10 coupon payments to maturity. Market rates are currently 5%. There are 90 days between settlement & next coupon payments. Find...

1 |
147 |

Sun Oct 28, 2012 11:53 pm

A bond portfolio manager invests USD 20mn in a bond issued at par that matures in 30 years & which promises to pay an annual interest rate of 9%. the interest is paid once per year, payments are reinvested at an annual interes...

2 |
204 |

Sun Oct 28, 2012 11:47 pm

Hi, Can anyone please highlight on SWAP rate & how it is calculated & difference between par rate, zero rate. Swarnendu

3 |
192 |

Sun Oct 28, 2012 10:31 pm

Assuming the long term yield of a perpetual note is 5%, compute Dollar Value of a 1 bp increase in yield (DV01) of a perpetual note paying a USD 1mn annual coupon. Please solve the question. Swarnendu

1 |
431 |

Sat Oct 27, 2012 8:26 pm

Hey Guys and Gals! I hope your preparations so far are going well <!-- s:D --><img src="{SMILIES_PATH}/icon_e_biggrin.gif" alt=":D" title="Very Happy" /><!-- s:D --> Thanks to several active members of the forum, it has come t...

0 |
600 |

Sat Oct 27, 2012 6:47 pm

The below question is from the online Pristine Quiz, answer is not understood. Can you pls provide all the values of the formula as explained below. I'm unable to understand the solution..Thanks Hanwha Investment is underwriting...

1 |
382 |

Sat Oct 27, 2012 1:42 pm

Please help me out with below question The ratio of Mean sum of residuals(MSR)/Mean squared Error (MSE) yields Choose one answer. a. The t statistic Incorrect b. SST Incorrect c. The F statistic Correct d. The standard e...

2 |
220 |

Fri Oct 26, 2012 1:23 pm

Question - Blodnick Corp has found that its weighted average collection period has increased from 50 days last year to 55 days this year, and its average days of receivables this year is 48 compared to 52 last year. It is most lik...

1 |
316 |

Fri Oct 26, 2012 12:21 pm

Consider the following statements about American options and choose the one which is not correct. Choose one answer. a. American call options are always worth greater than or equal to European call options. Incorrect b. Americ...

3 |
215 |

Fri Oct 26, 2012 11:52 am

A European call option on a dividend paying stock is priced at $4 and has a strike price of $20. The stock is trading at $20 and is supposed to deliver a dividend of $0.80 after 3 and again after 6 months. The risk free interest r...

5 |
265 |

Fri Oct 26, 2012 11:50 am

hi, please help me out with this question Suppose there are two call options on the same stock which is trading at $40. The options are having strike prices of $40 (C40) and $45(C45). Suppose the volatility of the stock increases ...

2 |
214 |

Thu Oct 25, 2012 7:39 pm

[b:2bbfda5h]test 1 : [/b:2bbfda5h] 9 A marketing survey shows that gate receipts would increase if the price of tickets to a summer rock concert increased, even though the number of tickets sold would fall. What does this imply ab...

1 |
425 |

Thu Oct 25, 2012 6:47 pm

Hi, Could some one help me, if revision class videos for Aug2012 are available in pristine site. If yes where can i find them. I am looking for VAR class one and two videos. Thanks, Sibbala

1 |
188 |

Tue Oct 23, 2012 8:11 am

Can anyone explian to me what is economic rent with example and how it differs from cost?

2 |
287 |

Mon Oct 22, 2012 10:18 am

Hello Sir / Madam, Is there Negative marking for d exams ? What is the passing score for L1 ?

1 |
431 |

Sat Oct 20, 2012 5:12 pm

Computer Package Co. considers the following swap contracts to hedge its interest rate exposure: Initiation Date: 15 June 1999 Termination Date: 15 June 2001 Notional Amount: $10 million Maturity: 1 years Floating Index: 6-month L...

2 |
234 |

Sat Oct 20, 2012 4:29 pm

1. In an industry, four firm concentration ratio is 35% and HHI index is 1150, then which of the following is correct? Choose one answer. a. Market is competitive as per four firm concentration ratio, moderately competitive as p...

2 |
294 |

Sat Oct 20, 2012 4:08 pm

1. The total revenue test is a method of estimating the price elasticity of demand by observing the change in total revenue that result from a change in the price, when all other influences on the quantity sold remain the same. Co...

7 |
489 |

Sat Oct 20, 2012 2:31 pm

Hello, Please help me with these questions.. 1) Which one of the following statements on hedging exotic options is incorrect? Choose one answer. a. Asian options are more difficult to hedge because they have more extreme gamma ...

1 |
259 |

Fri Oct 19, 2012 4:41 pm

Imagine a portfolio which holds two binary options, each with the same payoff and probability: USD - 100 with a probability of 4% and USD 0 with a 96% probability. Assuming the underlying has uncorrelated returns, what is the VaR ...

1 |
277 |

Thu Oct 18, 2012 2:52 pm

Hi, Have a doubt, in the below mentioned problem, the correct answer of forward rate is 12.19% with calculation method of (1 + R7)^7 = (1 + R6)^6(1 + F67) & slove for F67. But with the other method of (R2*T2-R1*T1)/(T2-T1) i a...

4 |
605 |

Thu Oct 18, 2012 2:39 pm

Hi, Please help me to solve this problem, I did'nt get the solution that is mentioned. Consider a $1,000 par value bond with a 7% annual coupon. The bond pays interest annually. There are 2 years remaining until maturity. What is...

2 |
226 |

Thu Oct 18, 2012 11:07 am

1. A marketing survey shows that gate receipts would increase if the price of tickets to a summer rock concert increased, even though the number of tickets sold would fall. What does this imply about the price elasticity of demand...

7 |
615 |

Wed Oct 17, 2012 4:36 pm

Hi Pristine, Please help me to find out the VaR of a portfolio...which probably could be Sd of portfolio*Z values. also if Portfolio A has VaR of 100 & B has VaR of 50, then how to calculate VaR of A+B. Also please state the i...

1 |
209 |

Mon Oct 15, 2012 4:19 pm

This is with regard to the Coal India IPO valaution case study. I noticed that in the Asset Schedule, you have a line item called "P&L Item:Depreciation Non Expense". I'm trying to understand what this is and how did...

2 |
448 |

Mon Oct 15, 2012 12:05 am

I am not clear with american option vs european option,i understand the concept of early termination(American) and termination at expiry of option(European). And why american call is not benificial for us in terms of early termina...

2 |
331 |

Fri Oct 12, 2012 10:30 am

f all spot interest rates are increased by one basis point, a value of a portfolio of swaps will increase by $1,100. How many Eurodollar futures contracts are needed to hedge the portfolio? Choose one answer. a. 22 Incorrect b...

1 |
200 |

Fri Oct 12, 2012 10:26 am

Please help me for this problm Roughly how many three-month LIBOR Eurodollar futures contracts are needed to hedge a position in a $200 million, 5-year receive-fixed swap? Choose one answer. a. Long 250 Incorrect b. Short 3,2...

1 |
183 |

Wed Oct 10, 2012 2:32 pm

Assume the following discount function, which is a set of discount factors: d(0.5) = 0.990, d(1.0) = 0.970, d(1.5) = 0.960, d(2.0) = 0.950. A U.S. Treasury bond pays a semi-annual coupon at a rate of 5.0% per annum and matures wit...

1 |
215 |

Wed Oct 10, 2012 12:51 pm

second query Alternative investments Postby deepakkrkanodia Â» Wed Oct 10, 2012 12:50 pm mr pankaj 1. what is the difference between control discount and liquidity discount in closely held company? plz explain the difference w...

1 |
242 |

Wed Oct 10, 2012 12:22 pm

Three different U.S. Treasury notes pay semi-annual coupons and mature in exactly one year; i.e., each pays the next coupon in six months and matures six months subsequently. The price of Bond A with a coupon rate of 2.0% per annu...

2 |
217 |

Tue Oct 09, 2012 6:20 pm

<!-- s:| --><img src="{SMILIES_PATH}/icon_neutral.gif" alt=":|" title="Neutral" /><!-- s:| --> Please help, i had the file but can not able to attach the file.. which is in excel I want to apply sensitivity analysis in overview ta...

1 |
376 |

Mon Oct 08, 2012 7:29 pm

Since the below data is the discrete distribution for worst 10 returns out of the 100, once we arrange the same starting worst first, wanted to reconfirm, if the 95% Var is the 95th item i.e. -0.7 OR is it the 5th Worst item i.e.-...

1 |
213 |

Mon Oct 08, 2012 7:24 pm

The below question asks about the Call Delta. Looks like the Answer is for the Put delta..Can you pls confirm !! 3. A 90-day European put option on Microsoft has an exercise price of $30. The current market price for Microsoft is...

4 |
320 |

Mon Oct 08, 2012 1:06 pm

plz explain in simple terms what do we mean by this paragraph along with real examples. When valuing closely held companies, lack of liquidity and lack of marketability can both be important factors.value can be determined by ana...

2 |
2292 |

Sat Oct 06, 2012 1:40 pm

Please explain the calculation A fund manager owns a $50 million USD growth portfolio that has a beta of 1.6 relative to the S&P 500. The S&P 500 Index is trading at 1,190. Calculate the number of futures contracts the fu...

3 |
286 |

Thu Oct 04, 2012 11:18 pm

A three-month European call option on the S&P 500 index is purchased at-the-money (ATM) when the index is at 1,400. The volatility of the index is 30.0% per annum and the dividend yield is 2.0% per annum. The risk-free rate is...

2 |
310 |

Wed Oct 03, 2012 6:07 pm

A trader in your bank has bought 200 call options contracts each on 100 shares of GM with time to maturity of 60 days at USD 2.10. The delta of the option on one share is 0.50. As a risk manager, what action must you take on the u...

1 |
215 |

Wed Oct 03, 2012 12:38 am

I am little much confused with the formula of joint probability multiplication rule that is; P(A and B)=P(A/B).P(B), Here can you please define me with an example which one is given to us A or B.

1 |
253 |

Mon Oct 01, 2012 1:03 pm

Robin Herring, CFA, is a government bond research analyst at an independent credit rating agency. A competitor credit rating agency just downgraded the bonds of a government Herring follows. Herring notes all of the information in...

1 |
1278 |

Sat Sep 29, 2012 4:14 am

Please clarify the below ethics questions which I marked incorrectly and still do not understand as to why my answer was incorrect . 1. Jefferson Piedmont, CFA, a portfolio manager for Park Investments, plans to manage the po...

2 |
441 |

Thu Sep 27, 2012 9:45 pm

QUESTIONS 1 : . A real estate investment has the following characteristics: Annual rental income $1,800,000 Annual operating expenses $1,200,000 Available mortgage rate 6% Financing percentage 90% Capitalization Rate 15% Estimat...

2 |
309 |

Thu Sep 27, 2012 11:55 am

Hi Pristine, please tell us when will be our revision class going to start?

1 |
306 |

Thu Sep 27, 2012 11:49 am

[b:pc43wt9f]Sartino Ratio[/b:pc43wt9f] Hi, I just want ask that if Minimum acceptable return(MAR) is not there in question then what should we used as MAR benchmark return or risk free rate? An analyst has compiled the followin...

1 |
575 |

Thu Sep 27, 2012 11:34 am

Hi, [b:1atzi5yb]I just want to ask which value should we take as a var in historical simulation like in this ques [/b:1atzi5yb] Assume that a risk manager wants to calculate VAR for an S&P 500 futures contract using the histor...

4 |
1005 |

Wed Sep 26, 2012 2:21 pm

Hi, Just refering to Value at Risk chapter of Options Futures & Other Derivatives of John C Hul. While calculating the portfolio (two asset case) VaR, Sd of portfolio has been calculated without considering weights of the asse...

1 |
209 |

Tue Sep 25, 2012 12:39 pm

Meshack Bradovic, CFA, was recently hired as a credit analyst at a credit rating agency whose major clients include publicly listed companies on the local stock exchange. One of the clients is currently preparing to issue a new bo...

2 |
392 |

Mon Sep 24, 2012 11:31 am

Hi, just came accross with Risk Adjusted performance measurement. Is there exist any specific formula to calulate RAP of a portfolio against its benchmark return?? Please help... Regards Swarnendu

3 |
358 |

Sun Sep 23, 2012 12:08 am

Hi, Can you please explain us below topic 1)Building interest on excess cash and cash revolver. 2)And how we can create dupont analysis the way it is created in Groupon model 3)Modelling Deferred tax. Thankyou, -Ajay Agarwal...

1 |
772 |

Sat Sep 22, 2012 3:07 pm

Hi, I'm from the August 12 2012 classroom batch at Khar Mumbai. On 9th Sept we had Quants Quiz in the classâ¦We were supposed to get the responses for the same ..So far we have not got it. There were about 60 questions in the s...

1 |
257 |

Sat Sep 22, 2012 3:04 pm

Hi, The response to question 12 - "A Trader......................keep it delta neutral " seems to be incorrect. The response provided is option A, but i feel option B is the right answer because we are trying to hedge a...

3 |
384 |

Sat Sep 22, 2012 8:16 am

If buyers receives the margin call, then security should bring back up to the maintenance margin or initial margin? what are the works of clearing houses and security exchanges?

2 |
322 |

Thu Sep 20, 2012 4:42 pm

Hi All, Just wanna to know about the basis of calculation of SSD. The material says that for calculating SSD only those return to be consider which fall below the corresponding benchmark. So my question is which return to consider...

1 |
420 |

Thu Sep 20, 2012 4:19 pm

what is reit and mlp.and differences of mutual fund and etfs.

1 |
245 |

Thu Sep 20, 2012 4:07 pm

Hi, Why unconditional Heteroskedasticity do not have or impact the statistica decission significantly?? As here also error terms have different variances with observations unlike homoskedasticity. Please explain. Regards Swarnend...

1 |
275 |

Thu Sep 20, 2012 4:03 pm

Hi, Can anybody highlight on Options Greeks about its significance, impact upon various spread strategies & interrelationship between all the 5 Greeks??? regards Swarnendu

1 |
210 |

Thu Sep 20, 2012 4:00 pm

Hi, Just came accross with very interesting derivation. The difference between future & forward price is used in any derivation synonimously. But the two can be different if there exist a correration between spot price (sp) &...

1 |
346 |

Wed Sep 19, 2012 7:39 pm

Hi All, Plz help in solving below question: Consider two stocks A and B. Assume their annual returns are jointly normally distributed, the marginal distribution of each stock has mean 2% and standard deviation 10%, and the corre...

6 |
501 |

Wed Sep 19, 2012 12:37 pm

Q The effects of decrease in interest rate(yield) volatility on the market yield of a debt security with a prepayment option and on a debt security with put option are most likely 1) prepayment option increase and put option decr...

2 |
267 |

Tue Sep 18, 2012 12:46 pm

[b:x7cv0xnm]Q. THE CURRENT PRICE OF A $1000, 7 YEAR, 5.5.% SEMI ANNUAL COUPON BOND IS $1029.23. THE BONDS PVBP IS CLOSET TO: A $0.05 B $0.60 C $5.74 PLZ TELL THE ANSWER AND HOW IT IS CALCULATED WITH EXPLAINATION[/b:x7cv0xnm]

1 |
208 |

Mon Sep 17, 2012 11:37 am

Hi, Can any one explain the specific concept of Contango & Backwardation & please refer its significance & impact in making market decision. Regards Swarnendu

4 |
402 |

Mon Sep 17, 2012 11:29 am

Hi, I came accross with one covariance problem as below. Can anyone help me out please. Suppose that (X, Y) has probability density function f(x, y) = x + y for 0 < x < 1, 0 < y < 1. Find a.cov(X, Y) b.cor(X, Y). Th...

2 |
238 |

Fri Sep 14, 2012 11:05 am

Year 0 1 2 3 4 Proj A NCF -2000 1000 800 600 200 Cum NCF -2000 -1000 -200 400 600 Year 0 1 2 3 4 Proj B NCF -2000 200 600 800 1200 Cum NCF -2000 -1800 -1200 -400 800 Payback for A 2+200/600 2.33 yrs Payback for B 3+400/1...

1 |
267 |

Thu Sep 13, 2012 8:39 pm

Q1.an analyst has compiled the following information: sortino ratio 0.82, beta 1.15,expected return 12.2%, standard deviation 16.4%,Benchmark return 11.9%, Risk free rate:4.75%. Calculate the semi standard deviation. the formula ...

1 |
620 |

Thu Sep 13, 2012 12:51 pm

Please give me the solutions to the following questions 4. An investor makes the following statement,â While testing the weak-form of EMH the returns from a trading rule must be calculated excluding any transaction charges becau...

1 |
257 |

Wed Sep 12, 2012 4:18 pm

sir plz explain the relationship between int rate risk and bond maturity and reinvestment risk of bond in terms of increase and decrease of either regards deepak kanodia

5 |
469 |

Wed Sep 12, 2012 11:58 am

Hanwha Investment is underwriting a 30-year zero coupon corporate bond issue with a face value of $50 million and a current market value of $2,676,776 (a yield of 5% per six-month period). The firm must hold the bonds for a few da...

3 |
463 |

Tue Sep 11, 2012 6:34 pm

How are full years until recovery, unrecovered cost at the beginning of last year and cash flow during the year calculated? Please refer the Eg on Pg 18 in Schweser. OR please tell me the steps for the same. Thanks

4 |
426 |

Tue Sep 11, 2012 1:32 pm

An American bank has a cash position of â¬1 million. The euro exchange rate is 0.95 USD/EUR. The 1-day euro exchange rate is normally distributed with mean 0.96 and standard deviation 0.01. Compute the 1-day VaR with 99% confiden...

5 |
465 |

Tue Sep 11, 2012 12:39 pm

Hi All, I have below query in Q_Valuation_Case_v4 sheet Balance sheet tab in some places I see =Assumptions!J17*('P&L'!J11/365)*2-BS!I12 formulae is used .Could you please advise why we have to multiply 2 and substract it for...

1 |
360 |

Mon Sep 10, 2012 2:40 pm

Hi, On page 147 there is an example of calcualting Money weighted return: Here: Purchase of first share is shown with a + sign. Later on, in the Concept Checkers section on page 164, the very first question is abt calculating...

2 |
369 |

Mon Sep 10, 2012 1:00 am

A firm has $3 million in outstanding 10-year bonds, with a fixed rate of 8% (assume annual payments). The bonds trade at a price of $92 per $100 par in the open market. The firmâs marginal tax rate is 35%. What is the after-tax ...

1 |
283 |

Sat Sep 08, 2012 2:46 pm

Hello, I am a student of Fin Modeling Module-I batch of Bangalore (June 16 Batch). I am confused with the "Incorporated Delay" spreadsheet which was included in Project Finance (Day 5). Can someone please upload or send ...

0 |
446 |

Sat Sep 08, 2012 11:43 am

Hi, please help me with this quest.. Under usually accepted rules of market behaviour, the relationship between parametric delta-normal VAR and historical VAR will tend to be Choose one answer. a. St1: Parametric VaR will be...

5 |
600 |

Fri Sep 07, 2012 2:57 pm

The under mentioned topics will be covered in FRM Part I / FRM Part II â¢ Inverse floaters â¢ Marginal VARs & D VARâs

1 |
353 |

Fri Sep 07, 2012 2:30 pm

The Quiz on Swaps BNP Paribas has just entered into a plain-vanilla interest-rate swap as a pay-fixed counterparty. Credit Agricole is the receive fixed counterparty in the same swap. The forward spot curve is upward-sloping. If ...

1 |
225 |

Thu Sep 06, 2012 5:10 pm

under independence and objectivity schweser notes guidance-buy side clients plz make understand the following statement- 1 buy side clients may try to pressure sell side analysts. Portfolio managers may have large positions in a p...

1 |
252 |

Thu Sep 06, 2012 3:36 pm

what is the difference in the three items below and what is their treatment: 1. Purchases of Stock in Trade 2.Cost of Materials Consumed 3.(Increase) / Decrease in inventories of finished goods, work-in-progress & stock-in-tr...

1 |
138 |

Thu Sep 06, 2012 10:42 am

The market yield on the companyâs long term debt is 8%. The risk premium for the equity is estimated to be 3 %. Can we estimate the cost of equity from the data given above? Choose one answer. a. No b. Yes and the value would b...

2 |
301 |

Thu Sep 06, 2012 10:26 am

The question states: A projectâs initial cost is $100 million, and the required rate of return is 10%. Following is the cash inflow for subsequent years: Year 1: $ 20 million Year 2: $ 50 million Year 3: $ 40 million The financi...

2 |
301 |

Thu Sep 06, 2012 10:18 am

This is regarding Q7 on the Corporate Finance Quiz II. The Question states : The average inventory of a manufacturing firm is $3.5 and the cost of goods sold is $24 million. Calculate the inventory turnover. a. 6.85 b.53.22 c. ...

2 |
373 |

Wed Sep 05, 2012 10:37 am

Consider a bond that pays an annual coupon of 5% and that has three years remaining until maturity. Assume the term structure of interest rates is flat at 6%. If the term structure of interest rates does not change over the next t...

1 |
269 |

Tue Sep 04, 2012 11:41 pm

Hello all, Can you Please look at this and help me. Which distribution does NOT tend to approximate the normal as one of its parameters increases? a) Bernoulli b) Binomial c) Poisson d) All of the above

1 |
168 |

Mon Sep 03, 2012 8:55 pm

sir plz tell me with practicle example on callable non refundable bonds as could not understand it? regards deepak kanodia

4 |
763 |

Mon Sep 03, 2012 4:05 pm

Hello, Why are callable common shares beneficial to the firm, especially if it can reissue the same at a higher price ? what kind of benefits do the firms derive ? Regrds,

1 |
307 |

Mon Sep 03, 2012 11:50 am

Almost half of sessions are over for Delhi July batch still Formula Charts are not available. Please provide these charts as soon as possible and if you cannot provide atleast communicate so that we donot waste our time expecting ...

0 |
332 |

Sun Sep 02, 2012 5:44 pm

Is pan card is allowed as an Identity card for enterence in FRM exam? (Novenber 17)

1 |
416 |

Fri Aug 31, 2012 11:07 pm

As it's already sep now do we have enough time to prepare for this exam...if so, plz advise how much time needs to devoted in order to get ready for the D-day. Appreciate your honest opinion. Many thanks

2 |
602 |

Wed Aug 29, 2012 8:52 pm

In the long-run, after all firms in a perfectly competitive industry have adopted new technology, the: A) price will equal minimum average total cost. B) individual firm supply will increase as demand decreases. C) price will ...

1 |
560 |

Wed Aug 29, 2012 8:20 pm

If the price elasticity of demand is 1.5 and a change in the price of the product increases the quantity demanded by 4%, then what is the percent change in price? A) +2.667%. B) â0.375%. C) â2.667%. the ans was c why not a...

1 |
563 |

Wed Aug 29, 2012 8:08 pm

Which of the following is least likely to be considered a reason why regulation of monopolies is not effective? A) Regulation reduces the incentive for firms to reduce costs. B) Regulators do not know the firmâs cost structu...

1 |
647 |

Tue Aug 28, 2012 7:41 pm

What is internally generated goodwill ? Is it treated as an asset ? Where does it fit in the balance sheet ?

3 |
938 |

Mon Aug 27, 2012 12:09 pm

Suppose X follows an AR(1) model : X(t)=0.1+0.8*xt-1+e(t), where ,E(e(t))=0. What is the long term mean of X? Choose one answer. a. 0.0000 b. 0.5000 c. 2.0000 d. 0.1250 can you please tell me the detailed solu...

1 |
569 |

Mon Aug 27, 2012 10:15 am

Respected Sir, I am attending FRM Part 1 classes Delhi batch 15 july 2012 . We have got all the study materials except the formula charts , can you pls tell us when we get them so that we don't waste our time preparing the f...

0 |
571 |

Thu Aug 23, 2012 12:40 pm

Please help to explain the below question Assume that a random variable follows a normal distribution with a mean of 50 and a standard deviation of 10. What percentage of this distribution is between 55 and 65? A. 4.56% B. 8.96% C...

2 |
654 |

Wed Aug 22, 2012 2:45 pm

hi, please let me know the answer of question no 24 and 25 chapter no 14, page no 196/197 in core reading of financial market and product.

2 |
859 |

Tue Aug 21, 2012 11:32 pm

Hii, Kindly clarify the doubts as apparently, it looks wrong to me. 1.<!-- m --><a class="postlink" href="http://www.edupristine.com/infrastructure/mod/quiz/attempt.php?id=4767">http://www.edupristine.com/infrastructu ... hp?id=...

0 |
976 |

Sun Aug 19, 2012 4:21 pm

with ref to the slide 61 of quant 1. Question says â¢ Company ABC was incorporated on January 1, 2004. it has expected annual default rate of 10%. Assuming a constant quarterly default rate, what is the probability that company ...

2 |
620 |

Sun Aug 19, 2012 6:25 am

kindly help me for the below quant problem this is at the slide No. 28 regarding HNI and LNI client. i have gone through recordings. i am able to understand the solution upto the stage of 5/12*7/18 + 7/12*6/18. but not able to ...

2 |
562 |

Sun Aug 19, 2012 1:38 am

What does it mean to say "NAV's are set to one currency unit" or "money market funds maintain a NAV of $1.00 per share" ?

1 |
920 |

Fri Aug 17, 2012 5:11 pm

[b:17jffowi]sir plz solve my doubts regarding below 2 question 1. a continuous uniform distribution has the parameters of a=4 and b=10. the F(20) is a. 0.25 b 0.50 c 1.00 the answer is 1.00. plz tel how it is calculated an...

2 |
1106 |

Fri Aug 17, 2012 12:19 pm

Hello Online Virtual Classroom Colleagues, I very much liked the lecture Quant-I and it was even better after a while, when everyone was trying to answer the questions faster and correct. Please join the study group and post y...

0 |
589 |

Tue Aug 14, 2012 4:14 pm

Hi, I am new to FRM. Can any body help me to let me understood how to solve this quant equation. like 10C3, or 10C3*20C3

1 |
487 |

Sun Aug 12, 2012 8:19 pm

plz explain stepwise: Find lower bound for European call X = $75, stock is trading at $73, RFR = 5%, 3 months expiry??

1 |
922 |