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chandniwadhwani92

Thu Jan 29, 2015 6:42 pm

CORPORATE FINANCE

stock dividend is a permanent capitalization of retained earnings to contributed capital. PLZ EXPLAIN

1

20

shuchidongre5

Sat Jan 24, 2015 3:11 pm

PDF Lock Lizard files :-PRMIA website

How can i access the Case studies in the PRMIA website as there is a PDF lock and I am getting an error while opening the PDF LockLizard files in the PRMIA website.Please help in the matter of urgency.

1

25

abhishek.benjamin

Wed Jan 21, 2015 8:04 pm

R- Software Lectures for last Module of Business Analytics

Hi !! I was wondering if I could get R- Software Lectures of Last module i.e 5_Predictive _Analytics as the commands for running Statistical Tests are give for SAS Software only. Also uptil 4 Modules we have been using only Excel...

2

44

abhishek.benjamin

Tue Jan 20, 2015 8:20 pm

Installing Package "sandwich" in R- Software

I downloaded R- Software and its working . However, when I try to install packages like "sandwich" , it shows following error: > install.packages("sandwich") --- Please select a CRAN mirror for use in this ...

1

30

abhishek.benjamin

Mon Jan 19, 2015 9:24 pm

Interpreting Multivariate Regression Equations !!

In 4_Predictive _Analysis, Page 105, Interpreting the Multivariate Linear Regression, we given the results as follows : A] AvgAge: - 5.560 -ve (Higher is the age, lower is the loss) B] Gender Dummy : 50.883 +ve (Average Loss fo...

3

48

chandniwadhwani92

Thu Jan 15, 2015 10:28 am

questions rly

when i will have ans of all my question its being so many days

1

37

chandniwadhwani92

Tue Jan 13, 2015 4:20 pm

QUANTITIVE METHODS

T-DISTRIBUTION As degree of freedom increases in t distribution tails becomes thinner and greater percentage away from center of distributions. Thickness of tails relative to those of Z distribution is important in hypothesis test...

1

44

chandniwadhwani92

Tue Jan 13, 2015 9:24 am

QUANTITIVE METHODS

SAMPLING DISTRIBUTION- It is important to recognize that sample statistic itself a random sample. Sampling distribution of sample statistic is a probability distribution of all possible sample statistics computed from a set of equ...

1

34

chandniwadhwani92

Mon Jan 12, 2015 10:58 am

Fixed income instrument

PURE DISCOUNT AND OTHER BONDS SOLD AT DISCOUNT TO PAR WHEN ISSUED ARE TERMED AS ORIGINAL ISSUE DISCOUNT Because the gain over an OID bonds tenor as price moves towards is par are real interest incomes. These bonds generate tax lia...

1

36

chandniwadhwani92

Mon Jan 12, 2015 10:34 am

Bonds

Taxation of bond income Some tax jurisdiction issue bonds at a premium to par provides a symmetric treatment ,allowing part of premium to b used to reduce taxable portion of coupon interest payments MY question How taxable portio...

1

51

aggarwal.karan13

Thu Jan 08, 2015 9:24 pm

Operational Risk

Sir , when we do copulas, we find out the joint probabilities of say loss frequency 1 and loss frequency 2, my doubt is what is the use of computing these probabilities, for Loss aggregation we have correlated frequencies and loss...

0

40

vivek.kaushik

Wed Jan 07, 2015 2:40 pm

Revenue

If company sales one of its assets eg. Building, then what comes under revenue only the gain or loss on the sale or the full sale price of the building including profit or loss? We should add profit and subtract loss to reach to ...

FSA

1

46

hardik.cfa39

Wed Jan 07, 2015 2:09 pm

how to calculate adusted stock & fix assect

hiiii,,,, i want to know that how to calculate adjusted stock and fix asset for future because in calss we have given assumpstion but in real there is nothing reguarding fix asset and adjustmest stock in anual report than how to c...

1

41

j.himanshi

Wed Jan 07, 2015 11:39 am

PRM

Has the course material changed or will change in near future? Should I continue reading from the notes provided by Edu pristine

Prm

1

50

shuchidongre5

Sun Jan 04, 2015 3:06 pm

Finite Difference Method

In video for PRM -2 under the Finite Difference Method the Implicit,Explicit and Clark Nicholson method are unclear ...could you explain in simplfied manner.

2

70

jeni.s.iyer

Sat Jan 03, 2015 10:29 am

Hi . Need for recorded videos

I could not attend my hadoop classroom training classes on dec 27 and dec 28th 2014.Kindly provide me with recorded sessions to cover up the topics , Plz help . Topics were 1. introduction to HDFS 2. Understanding Pseudo cluster e...

1

62

shuchidongre5

Fri Jan 02, 2015 2:45 pm

PRM reading materials.

I have the PRiMIA handouts as well as Eduprisitne material as well.could you please suggest whether your reading material are sufficient enough to take PRM exam or I need to read huge PRM material as well.

1

53

chandniwadhwani92

Wed Dec 24, 2014 4:59 pm

Fixed income instrument

Financial lease-In this asset is purchased by financing loan .With this both asset and liabilities are increased by same amount Over the term of lease lessee records depreciation expenses in asset and interest expenses in liabilit...

1

143

chandniwadhwani92

Wed Dec 24, 2014 1:50 pm

Fixed income instrument

Difference between interest expenses on bonds and coupon payments Are interest expenses included in coupon payments

1

161

chandniwadhwani92

Mon Dec 22, 2014 7:11 pm

Financial Rporting

Start with net income. Add back non-cash expenses. (Such as depreciation and amortization) Adjust for gains and losses on sales on assets. Add back losses Subtract out gains Account for changes in all non-cash current assets. Acco...

1

173

chandniwadhwani92

Sun Dec 21, 2014 10:32 am

Fixed income instrument

Higher spread between corporate bond and treasury bod are beneficial or lower spread PLZ EXPLAIN THE F ADVANTAGE AND DISADVANTAGE OF HIGH AND LOW SPRAED

1

210

chandniwadhwani92

Sun Dec 21, 2014 9:40 am

Fixed income instrument

TERM STRUCTURE OF YIELD VOLATILITY SOURCE OF QUESTION- SCHWESER BOOK 5 FIXED INCOME RISK AND RETURN PAGE 96 It could b the case the shorter term bonds has more price volatility than a longer term bonds with a greater duration beca...

1

199

chandniwadhwani92

Sun Dec 21, 2014 9:26 am

Fixed income instrument

Difference between money duration and price value of basis points??????? How shorter term bonds has high yield voltalituy

1

186

chandniwadhwani92

Sun Dec 21, 2014 6:10 am

Fixed income instrument

in schweser it is given that modified duration is a linear extimate of relation between bond price and ytm?????? What does linear extimate means nd curvlinear means What is an exact difference between modified duration and approxi...

1

203

chandniwadhwani92

Sun Dec 21, 2014 6:02 am

Fixed income instrument

can u expalin the difference between positive and negative duration

1

201

chandniwadhwani92

Sat Dec 20, 2014 4:23 pm

Fixed income instrument

what does per ca pita debt meaning

1

201

chandniwadhwani92

Sat Dec 20, 2014 3:01 pm

Fixed income instrument

A 1000 face value 5 year bond annual coupon 5% Fully amortizing loan PMT= 230.97 230.97 230.97 230.97 230.97 Principal remainig- 819.0 629.01 429.49 219.99 0 How did they calculate PMT and principal amount in fully amortising bon...

1

209

chandniwadhwani92

Sat Dec 20, 2014 2:59 pm

Fixed income instrument

Assume a city issues a $5 million bond to build a new arena. The bond pays 8% semiannual interest and will mature in 10 years. Current interest rates are 9%. What is the present value of this bond and what will the bond's value be...

1

227

chandniwadhwani92

Sat Dec 20, 2014 6:56 am

Fixed income instrument

A 1000 face value 5 year bond annual coupon 5% Fully amortizing loan PMT= 230.97 230.97 230.97 230.97 230.97 Principal remainig- 819.0 629.01 429.4...

2

240

chandniwadhwani92

Sat Dec 20, 2014 6:48 am

Fixed income instrument

what are covered bonds?

1

231

chandniwadhwani92

Fri Dec 19, 2014 5:53 pm

Fixed income instrument

FLOATING RATE DEBT purchasing floating ate debt is attractive to some institutions that have variable rate source of funds (liabilities) such as banks.This allows these institutions to avoid balance sheet effects of interest rate...

1

268

chandniwadhwani92

Fri Dec 19, 2014 1:10 pm

Financial Rporting

what does impairment of assets means

1

261

chandniwadhwani92

Thu Dec 18, 2014 2:46 pm

Fixed income instrument

Today an investor purchases a $1,000 face value, 10%, 20-year, semi-annual bond at a discount for $900. He wants to sell the bond in 6 years when he estimates the yields will be 9%. What is the estimate of the future price? A) $1...

1

325

chandniwadhwani92

Thu Dec 18, 2014 2:25 pm

Fixed income instrument

Assume a city issues a $5 million bond to build a new arena. The bond pays 8% semiannual interest and will mature in 10 years. Current interest rates are 9%. What is the present value of this bond and what will the bond's value be...

2

356

chandniwadhwani92

Thu Dec 18, 2014 2:24 pm

Fixed income instrument

Interest rates have fallen over the seven years since a $1,000 par, 10-year bond was issued with a coupon of 7%. What is the present value of this bond if the required rate of return is currently four and one-half percent? (For si...

1

311

Ravi

Wed Dec 17, 2014 8:33 pm

Capital Budgeting

In case a new capital asset is purchased, extra working capital in required. So there is cash outflow. But why this same extra working capital will be treated as inflow at the end. My point is any extra working capital which is re...

1

370

Ravi

Wed Dec 17, 2014 8:01 pm

Capital Budgeting

Basic Principle of Capital Budgeting- Financing Costs ( Like Interest Rate) are not considered as a part of the cash flows because they already considered in project's hurdle rate. Need more clear explanation with example. Exam...

1

384

chandniwadhwani92

Wed Dec 17, 2014 7:00 pm

Derivative

Scheswer book 5 level 1 Future contract Termination of contract Sales of future contract ends the exposure to future price fluctuations on the first contract. What does this means?/

1

345

chandniwadhwani92

Wed Dec 17, 2014 6:38 pm

Derivative

What is settlement price and equilibrium price in future market

0

333

chandniwadhwani92

Wed Dec 17, 2014 5:31 pm

Derivative

In schweser Page 166 book 5 Future contract characteristics Standardization- exchange can also set the minimum price fluctuations which is called tick size Maximum price limits expands during the period of high volatility and ar...

0

341

chandniwadhwani92

Mon Dec 15, 2014 5:40 pm

Financial Rporting

Expenses are calculate to generate revenue.Expenses decrease economic benefit due to outflow during accounting period or depletion of asset or occurrence of liabilities that results in decrease in equity other than those relating ...

1

482

chandniwadhwani92

Sun Dec 14, 2014 3:07 pm

Financial Rporting

A disclosure that is required for public companies is the likely impact of implementing recently issued accounting standards. Management can discuss the impact of adopting the standard, conclude that the standard does not apply or...

1

508

chandniwadhwani92

Sat Dec 13, 2014 8:38 am

COMMODITY

COMMODITY FUTURE CONTRACTS REFLECTS RISK FREE RATE OF RETURN,CHANGE IN FUTURE PRICE AND ROLL Furthermore CONTRACT MATURES AND MUST B REPALCED OVERTIME BY OTHER CONTRACT THE RETURN ON COMMODITY FUTURE DIFFERS FROM RETURN ON LONG PO...

1

566

chandniwadhwani92

Sat Dec 13, 2014 8:34 am

hedge funds

Hedge fund are largely unregulated and are not required to report their performance. Hedge funds that have reported in past byt have recently had poor returnns may stop performing their performance this result in upward bias i ind...

1

558

chandniwadhwani92

Fri Dec 12, 2014 10:53 am

alternative investment

What would b return on commodities and its volatility Higher or Lower

1

582

chandniwadhwani92

Fri Dec 12, 2014 10:51 am

alternative investment

Return on commodity over time have been lower than return on global stocks or bonds????? How return are lower for commodities?/ To the extent commodity price move with inflation rate real return would b 0 how real return would b ...

1

611

narayani.ankit

Sat Dec 06, 2014 12:03 pm

does a/c receivables is part of quick ratio?

And what si the difference between marketable securities and a/c recviables?

1

687

narayani.ankit

Sat Dec 06, 2014 11:33 am

Sunk cost VS floating cost

Sunk cost is not a part of the incremental cash flows..But should it be added to initial cost?And how do we treat floating cost?

1

650

chandniwadhwani92

Wed Dec 03, 2014 7:47 am

bond equivalent yield

Formulas to convert bank discount yield to an holding period yield and holding period yield to an money market yield

1

534

chandniwadhwani92

Wed Dec 03, 2014 7:38 am

bond equivalent yield

Efective annual yield on an investment is 8%.What is the yield on a bond equivalent basis?/ QUESTION How to convert annual yield in semi annual???????? 3 month loan has a holding period yield of 2%? What is the yield on bond equ...

1

632

narayani.ankit

Tue Dec 02, 2014 1:52 pm

Corporate Finance

pv=-10000 i/y=5 n=20 cpt.pmt=802 i have to cpmpute pmt and the above info is stated in the book but when I am trying it on the calculator i am getting 812 and the calculation is done in the end mode Please help

1

579

chandniwadhwani92

Mon Dec 01, 2014 11:16 am

Answers needed

wen i can have answers of all my doubts... No answers from s many dayz

0

589

chandniwadhwani92

Sat Nov 29, 2014 6:36 am

corporate finance

Can opportunity cost can b considered as negative externality

1

505

chandniwadhwani92

Fri Nov 28, 2014 5:50 pm

leverage

Degree of operating Leverage SUppose there are two company A and B Company A's Initial sales-50000 pRICE-4 Variable cost-3 Degree of operating leverage- 50000(4-3)/ 50000(4-3)-40000= 50000/10000 DOL- 5 It means for every one per...

1

463

bilal

Thu Nov 27, 2014 4:44 pm

Operational Risk Modeling(continuous distribution)

1. how to decide a seed value of a parameter while implementing MLE ? 2. how to calculate MME for weibull distribution ? 3. How to calculate GPD if I do not want to use custom function ?

1

540

chandniwadhwani92

Thu Nov 27, 2014 1:32 pm

time value

While calculating NPV when would present value be 0 or 1 and also wen will b future value 1 or 0 Under which case present value would b 0 and in which case present value would b 1? Under which case futuret value would b 0 and in w...

1

520

chandniwadhwani92

Thu Nov 27, 2014 9:28 am

corporate finance

Difference between bond equivalent yield and discount basis yield and money market yield

1

467

chandniwadhwani92

Thu Nov 27, 2014 9:03 am

corporate finance

Difference between bond equivalent yield and discount basis yield

1

486

chandniwadhwani92

Thu Nov 27, 2014 8:55 am

corporate finance

Liquidating Dividend- It is treated as return on capital and amount over the investors tax basis are treated as capital gains What does it means? Plz explain tax purpose o liquidating dividend?????????

1

506

chandniwadhwani92

Thu Nov 27, 2014 8:53 am

corporate finance

As company pays dividend from their reserved.... How it will effect book vale of company. Difference between book vale and shareholders eqity

1

438

chandniwadhwani92

Thu Nov 27, 2014 8:52 am

corporate finance

As we know that npv profiles intersect at crossover rate where npv of two project are equal.This intersection could take place because of timing difference How because of difference in time will make two projects NPV equal????

1

466

chandniwadhwani92

Thu Nov 27, 2014 8:51 am

corporate finance

in schweser it is given when company pays stock dividend from reserves it will decrease reserves and increase share capital. How share capital will increases as we know shareholders do not provide capital when they get stock divid...

1

399

chandniwadhwani92

Wed Nov 26, 2014 6:41 am

Answers needed

when can i have answers of all my questions???????????

0

437

chandniwadhwani92

Sun Nov 23, 2014 6:09 am

corporate finance

explain book vale of company and market value of company in reverse stock split as well book value per share and market vale per share in reverse stock split

1

418

chandniwadhwani92

Sun Nov 23, 2014 4:49 am

corporate finance

SHARE REPURCHASE As in the corporate finance slide it is given while repurchasing total book vale per share changes but market value per share does not change Can u explain plz how there wold b effect on book vale but not on mar...

1

443

chandniwadhwani92

Sat Nov 22, 2014 8:03 pm

corporate finance

Do company pays dividend to shareholder after stock split and reverse stock split

1

371

chandniwadhwani92

Sat Nov 22, 2014 6:40 pm

corporate finance

In schweser it is given when company pays stock dividend from reserves it will decrease reserves and increase share capital. How share capital will increases as we know shareholders do not provide capital when they get stock div...

1

379

chandniwadhwani92

Sat Nov 22, 2014 6:07 pm

corporate finance

As company pays dividend from their reserved.... How it will effect book vale of company. Difference between book vale and shareholders eqity

1

342

chandniwadhwani92

Sat Nov 22, 2014 5:37 pm

corporate finance

As company pays special dividend in addition of regular dividend. Do shareholder pays extra tax for special dividend they gets

1

308

chandniwadhwani92

Sat Nov 22, 2014 5:22 pm

corporate finance

Liquidating Dividend- It is treated as return on capital and amount over the investors tax basis are treated as capital gains What does it means? Plz explain tax purpose o liquidating dividend?????????

1

429

chandniwadhwani92

Sat Nov 22, 2014 9:52 am

corporate finance

As we know that npv profiles intersect at crossover rate where npv of two project are equal.This intersection could take place because of timing difference How because of difference in time will make two projects NPV equal????

1

381

chandniwadhwani92

Sat Nov 22, 2014 8:54 am

corporate finance

As we know cash flow in NPV are reinvested at market rate. It is assumed that project cash flow could be used to reduce firms requirement this will reduce cost of capital How cost of capital will reduce by decreasing firms capit...

1

345

chandniwadhwani92

Fri Nov 21, 2014 6:49 pm

corporate finance

Q-1 Firm with limited access to additional liquidity often impose a maximum payback period then use a measure of profitability such as npv and irr to evaluate project that satisfy maximum payback period constraints What does this...

1

249

kumar.hemant

Thu Nov 20, 2014 8:25 am

Corporate Finanace

So if I understand correctly, when the coupon rate is fixed then there would be no difference between coupon rate and YTM?? It's only when bonds are issued on floating rates then there would be difference?

1

204

mehak.officiallink

Tue Nov 18, 2014 7:16 pm

Cfa level 1 : economics

If the foreign exchange value of domestic currency falls relative to the US dollar, the monetary authority must use foreign reserves to purchase their domestic currency in order to reach target exchange rate. Please explain how is...

1

153

mehak.officiallink

Tue Nov 18, 2014 7:15 pm

CFA level 1 : economics

Who are bond vigilates ? How do they reflect problem in transmission mechanism ?

1

170

chandniwadhwani92

Tue Nov 18, 2014 6:07 am

cash flow

Do we DEDUCT or ADD taxes paid or receivable while calculating CFO IN INDIRECT METHOD? Can u describe tax treatment in indirect method while calculating CFO?????/

1

140

chandniwadhwani92

Tue Nov 18, 2014 6:03 am

cash flow

DESCRIBE HOW CASH LOW LINKED TO INCOME STATEMENT AND BALANCE SHEET when revenue( sales) exceeds cash collection firm sold item on credit and account receivable( an asset) increase. The opposite occurs when customer repay more on ...

1

133

mehak.officiallink

Tue Nov 18, 2014 5:44 am

FRA : goodwill

A company recorded rs. 200000 of goodwill in acquisition of competitor. Acquisition would provide benefits for 10 years. Will goodwill be amortised over 10 years ?

1

102

chandniwadhwani92

Tue Nov 18, 2014 5:25 am

cash flow

How free cash flow to the firm and equity are calculated under ifrs ?????/

1

111

kumar.hemant

Mon Nov 17, 2014 4:18 am

Corporate Finanace

Please could someone advise the differnece between coupon rate and yield to maturity on debt for in refrence to cost of debt? Regards Hemant 9891848532

3

98

chandniwadhwani92

Sun Nov 16, 2014 8:50 pm

Financial Rporting

Goodwill is created in purchase acquisition What does it mean? Since goodwill is no amortized but must be tested for impairments at least annually. If impaired goodwill is recognized and loss is recognized in the income statement...

3

110

mehak.officiallink

Sun Nov 16, 2014 2:51 pm

Level 1 : economics : exchange rate targeting

If the foreign exchange value of domestic currency falls relative to the US dollar, the monetary authority must use foreign reserves to purchase their domestic currency in order to reach target exchange rate. Please explain how is...

1

78

mehak.officiallink

Sun Nov 16, 2014 2:41 pm

Level 1 : economics : limitations of monetary policy

Who are bond market vigilantes ? How do they reflect problem in the monetary transmission mechanism ?

1

106

chandniwadhwani92

Sun Nov 16, 2014 2:30 pm

Fixed income instrument

Difference between comprehensive income and accumulated comprehensive income?

2

88

chandniwadhwani92

Sun Nov 16, 2014 1:54 pm

Financial Rporting

what is non controlling interest( minority interest)

1

71

chandniwadhwani92

Sun Nov 16, 2014 1:45 pm

Financial Rporting

Preferred stock Preferred stock that calls for mandatory redemption in fixed amount is considered as financial liability. Why they are considered as financial liability???????????

1

81

chandniwadhwani92

Sun Nov 16, 2014 1:33 pm

Financial Rporting

SHAREHOLDER'S equity PAR VALUE OF COMMON STOCK IS STATED OR LEGAL VALUE. IT HAS NO RELATION WITH FACE VALUE. SOMETIMES COMPANIES ISSUE SHARES WITH NO PAR VALUE Q-1 Difference between par value and face value? Q-2 Why companies i...

1

70

mehak.officiallink

Thu Nov 13, 2014 5:23 pm

CFA level 1 : Financial assets

Why is it that unrealised gains/losses of "securities held for trading" reported in the Income statement but for "securities available for sale" it is reported in other comprehensive income ?

4

108

mehak.officiallink

Wed Nov 12, 2014 3:28 pm

CFA level 1 : FRA : LIFO reserve

What is a LIFO reserve ? If Current asset is $10 million Current liab is $ 5 million Lifo reserve 2013 $ 500000 Lifo reserve 2014 $ 700000 Why is lifo reserve of 2014 added to current asset to determine the adjusted current ratio...

3

90

aroranidhi2004

Wed Nov 12, 2014 6:26 am

NPV problem

Meredith Suresh, an analyst with Torch Electric, is evaluating two capital projects.Ã Project 1 has an initial cost of $200,000 and is expected to produce cash flows of $55,000 per year for the next eight years.Ã Project 2 has...

1

90

aroranidhi2004

Tue Nov 11, 2014 9:45 pm

Multiple IRR problem

Which of the following statements about the internal rate of return (IRR) for a project with the following cash flow pattern is CORRECT? Year 0: -$ 2,000 Year 1: $10,000 Year 2: -$ 10,000 A) It has two IRRs of approximately ...

2

91

anbu.edu

Tue Nov 11, 2014 11:15 am

FRM II-BASEL 2

If a bank retains the equity (junior) tranche of a securitization where the notional of the tranche is $10 million and the tranche has a long-term âB-â credit rating, what is the capital charge under the standardized approach ...

1

83

chandniwadhwani92

Tue Nov 11, 2014 6:08 am

icome taxes

chandniwadhwani92 Tue Nov 11, 2014 6:02 am icome taxes Finacial Reportif for 4 years YEAR1 YEAR2 YEAR 3 YEAR4 REVENUE 50000 50000 50000 50000 DE...

1

88

chandniwadhwani92

Tue Nov 11, 2014 6:02 am

icome taxes

Finacial Reportif for 4 years YEAR1 YEAR2 YEAR 3 YEAR4 REVEUE 500000 500000 500000 500000 DEP 30000 ...

1

84

anbu.edu

Sun Nov 09, 2014 1:40 pm

EDU mock 1 question 43

Sorry i cant past the question in here bcos of pic formate -If possible can you refer My doubt is can you elaborate how to calculate time weighted rate of return how in period 2 450 came why it divided by 3100..please help me

1

97

anbu.edu

Sun Nov 09, 2014 11:43 am

EDU mock

In a basket CDS ,the reference portfolio has 16 assets with varying credit grades of USD 0.5 million each. The portfolio holder wants to buy protection by way of basket CDS only on 5 subordinate credit exposures and leave the seni...

1

78

aroranidhi2004

Fri Nov 07, 2014 4:21 am

Fixed Income question

Which of the following is most likely to be the money duration of newly issued 360-day eurocommercial paper? A) 360 days. B) 4.3%. C) 25 million.

3

116

anbu.edu

Thu Nov 06, 2014 2:27 pm

FRM II-OR EDU 3

The capital charge for market risk for banks subject to the market risk rule is: Select one: a. Three times the calculated VaR b. The average VaR over the last 50 days c. The higher of the previous day's VaR, or 3 times the averag...

1

117

anbu.edu

Thu Nov 06, 2014 7:08 am

FRM II-CCDS

can anybody explain CCDS to me... to my understanding its like CDS but it cover large type of derivative and it replaces any one which is defaulf..please correct me if i am wrong

1

92

nsnisha.singh2008@gmail.com

Thu Nov 06, 2014 5:34 am

Valuation of Companies

Could you please me the concept of Fixed Capital Investment while valuating a company? Is it just increase in CAPEX or increase in CAPEX and CWIP? The template provided for Coal India has calculated just CAPEX while the template ...

1

92

anbu.edu

Wed Nov 05, 2014 5:29 pm

FRM II-Counterparty

For a portfolio of derivative contracts, Analyst Jane wants to estimate her firm's counterparty exposure on a future target date, T(1), which is one year forward. For convenience, she assumes the future value of the portfolio at t...

1

108

anbu.edu

Wed Nov 05, 2014 5:26 pm

FRM II-CVA

Acme Bank (A) is the floating-rate payer in an interest rate swap. Big Credit Corporation (B) is the counterparty who is the fixed-rate payer. Acme pays LIBOR in exchange for a fixed rate of 4.0% per annum. The credit valuation ad...

3

115

aroranidhi2004

Wed Nov 05, 2014 3:20 am

Fixed Income

A disadvantage of G-spreads and I-spreads is that they are theoretically correct only if the spot yield curve is: A) upward sloping. B) downward sloping. C) flat. why G-spreads and I-spreads are accurate only when spo...

4

136

chandniwadhwani92

Tue Nov 04, 2014 7:14 pm

equity

As we know shareholders equity formula - share capital+retained earning-treasury shares HOW COMPANY CALCULATE RETAINED EARNING IN THIS

1

103

chandniwadhwani92

Tue Nov 04, 2014 6:18 pm

equity

EXPLAIN THE CONCEPT OF INCREAING ROE WHEN THERE IS DECREASE IN BOOK VALUE

1

91

chandniwadhwani92

Tue Nov 04, 2014 5:50 pm

equity

An increase in share price will decrease expected return other thing being equal. plz explain it Intrinsic value of firms share is the discounted preset value of its future cash flows an increase in required return used to discoun...

1

86

chandniwadhwani92

Tue Nov 04, 2014 5:19 pm

equity

Difference between return on equity and market value of equity

1

88

chandniwadhwani92

Tue Nov 04, 2014 5:17 pm

equity

1-Difference between book value per share and price to book ratio??? 2- As we know book value increases when net income increases But in schswer it is given ROE increase when when book value is decreasing more rapidly than net inc...

1

102

aroranidhi2004

Mon Nov 03, 2014 6:45 pm

Quant probability question

The number of days a particular stock increases in a given five-day period is uniformly distributed between zero and five inclusive. In a given five-day trading week, what is the probability that the stock will increase exactly th...

4

144

chandniwadhwani92

Mon Nov 03, 2014 3:58 pm

equity

The security on which the ADR is based in American deposit share which trades in firm domestic market What does this sentence meas?/// Can u briefly explain American deposit share????? Some firms i AdR are registed in SEC BUT SO...

1

88

chandniwadhwani92

Mon Nov 03, 2014 3:54 pm

equity

1.Depositary recipts It represent ownership i foreign firms ad are traded in market of other countries what would b the currency denomination ???/ For ex- If Indian company is listed in japan.here currency denomination would b in ...

1

84

chandniwadhwani92

Mon Nov 03, 2014 8:35 am

equity

In collable common shares it is given it allows the firm to reduce its dividend payment without changing its per share dividend How per share dividend wont b change when dividend payment is reudced

2

147

j.himanshi

Mon Nov 03, 2014 6:08 am

PRM - MTM vs Yield

In market risk what is MTM and how MTM record losses when yield increases above at par by 10% and vice versa. What is the relation

1

89

rymingangel01

Mon Nov 03, 2014 5:51 am

Fixed income money market yields

how to calculate yield as per discount basis and add on basis.and what is the formula for PV calculation in both the methods?

1

108

chandniwadhwani92

Sun Nov 02, 2014 6:40 pm

equity

Put option on the shares benefits the shareholder because it effectively place a floor under share value. What does it mean placing a floor value

1

103

chandniwadhwani92

Sun Nov 02, 2014 6:31 pm

equity

In schswer pg 260 it is given if holder has 30% of firm share could choose 3 of 10 directors in cumulative voting but could not elect any director in statutory voting why cant he elect in statutory????//

1

96

chandniwadhwani92

Sun Nov 02, 2014 6:29 pm

equity

explain statutory voting with example. For example if shareholder gas 100 share and 3 directors to b elected then in statutory how shares would be divided to elect directors. Can he proportionately divide his share to all the 3 ...

1

97

r.kumar30189

Sun Nov 02, 2014 12:28 pm

Doubts relating to Portfolio Management

I had little difficulty understanding the following.Can somebody please explain. 1.Efficient Frontier 2.Capital Allocation Line 3.Security Market Line

1

110

chandniwadhwani92

Sun Nov 02, 2014 10:11 am

security market

FIXED INCOME INDICES Large UNIVERSE OF SECURITY= As unlike stocks bond matures and must b replaced with fixed income indexes.As a result turnover is high in fixes income index.. What does this sentence means?

1

90

chandniwadhwani92

Sun Nov 02, 2014 10:06 am

security market

What is multi market index with fundamental weighting and style index?? In multi market index it is given it prevents a country with previously high stock returns from being over weighted in multi market index what does this sent...

1

85

chandniwadhwani92

Sun Nov 02, 2014 8:01 am

security market

Floor adjusted market capitalization weighted index Here proportion are based on value of each firms share that are available to investors to the total market value of the share of index stock that are available to investors Expla...

1

86

chandniwadhwani92

Sun Nov 02, 2014 7:57 am

security market

In market capitalization weighted index A market capitalization weighted index can b matched with a portfolio in which the vale of each security position in the portfolio is the same proportion of the total value as the proportion...

1

95

chandniwadhwani92

Sat Nov 01, 2014 6:01 pm

security market

Price weighted index In schswer it is given A portfolio that has an equal number of share in each of constituent stocks will have price return same that will match the returns of price weighted index... Here equal number of share...

1

84

aroranidhi2004

Sat Nov 01, 2014 4:50 pm

quant probability question

For a stock, which of the following is least likely a random variable? Its: A) stock symbol. B) current ratio. C) most recent closing price. pls help with appropriate explanation. Regards, Nidhi

2

114

anbu.edu

Sat Nov 01, 2014 4:03 pm

FRM II-CR5

Under Malz's single-factor credit model, a(T) = beta*m + SQRT(1-beta^2)*epsilon, a firm has a beta of 0.40 and an unconditional default probability of 3.0%. If we enter a modest economic downturn, such that the value of (m) = -1.0...

1

97

anbu.edu

Sat Nov 01, 2014 11:32 am

VAR-MARKET,CREDIT and operation

What is the VAR CONFIDENCE INTERVAL for three types of risk IS MKT=95 and CR and OR =99 am i correct???

2

120

anbu.edu

Sat Nov 01, 2014 8:27 am

Point UPfront

I cant get a clear hang of it..to my understanding point upfront is an amt paid at the beginning of the contract..like an initial margin.. is my understanding correct or am i missing something

1

80

anbu.edu

Sat Nov 01, 2014 8:21 am

MBS

Can anybody help me understand attachment and detachment points in MBS- with an example

1

113

zarbanx12

Sat Nov 01, 2014 7:40 am

Do we need to pass all subjects to clear CFA level 1? Is the

Do we need to pass all 10 subjects to clear CFA Level 1. I know Ethics is important. Is there any subject in which we can get below 50% and still clear CFA level 1. What is the minimum passing score for all subjects? Also is ther...

1

141

j.himanshi

Fri Oct 31, 2014 8:09 am

PRM

I wanted to know is it wise to opt for PRM III paper as first exam . Also, pls let me know does the online recordings / videos that has been provided is good enough to prepare for the exam as I am yet to enroll myself with the PRI...

1

103

tell2rekha

Thu Oct 30, 2014 7:01 pm

Edu Mock test II-QNo-2

Sam, an analyst at Alpha Catalyst fund, finds out the following statistics based on historical data. Only 20% of subsidiaries of Alpha Catalyst are in the âElite listâ published by their newsletter. The rest of subsidiaries ar...

1

196

chandniwadhwani92

Thu Oct 30, 2014 4:57 pm

portlofio

Difference between correlation and beta

1

89

anbu.edu

Thu Oct 30, 2014 3:41 pm

EDU mock 2

Consider a simple two firm credit portfolio with the following probabilities given: Firm 1 defaults over time horizon t, f1= 0.30 Firm 2 defaults over time horizon t, f2= 0.25 Joint probability that both firms will default over ti...

1

84

anbu.edu

Thu Oct 30, 2014 3:33 pm

SIMILAR QUESTION DIFFERENT ANSWER

anbu.edu Sat Oct 18, 2014 1:46 pm In the Merton model, with only debt and equity in the capital structure, the value of debt will increase in value if the: I. interest rate declines. II. volatility of firm value increases. III. va...

3

121

anbu.edu

Thu Oct 30, 2014 3:23 pm

FRM mock 2

For a bank, what should be the economic capital so that we can avert 95% of the time the unexpected loss? Assume the unexpected loss follows the function F(x)= e^(( x6)^ 2/36) . Select one: a. 15 million $ b. 11 Million $ c. 12 Mi...

1

84

mdbaboo

Thu Oct 30, 2014 8:07 am

CPA with Financial Modelling

Any body here, who has done cpa or pursuing CPA, lets have discussion on this. How is FM helpful in CPA.

1

95

chandniwadhwani92

Thu Oct 30, 2014 7:13 am

portlofio

Zero variance portfolio can b constructed if the correlation coefficient between asset is -1. Can u explain this sentence with diagram

3

160

chandniwadhwani92

Tue Oct 28, 2014 10:08 am

portlofio

Airthemetic mean return has statistical property of being an unbiased estimator of the true means of the underlying distribution of returns.. What does this sentence means?????/

1

82

chandniwadhwani92

Tue Oct 28, 2014 9:23 am

portlofio

Reason for less capital gains liability in ETFS as compared to open ended funds????

3

110

chandniwadhwani92

Tue Oct 28, 2014 9:10 am

portlofio

Q=1 Describe Tax implication of CLOSED ENDED FUNDS,OPEN ENDED FUNDS AND ETFS? Q=2 Do closed ended funds charge brokerage fees or management fees?? Q=3 Although closed ended funds are sold out in secondary market but they are in...

3

125

tell2rekha

Mon Oct 27, 2014 11:05 pm

VAR FRM I,Schweser Notes Q.52

Given the 1 year transition matrix below,what is the probability that a company that is currently B rated default over will default over a given 2-year period. Initial period state Next period State ...

1

99

anbu.edu

Mon Oct 27, 2014 3:01 pm

FRM II-mock 2

For two comparable US callable corporate bonds, which have the same credit rating, maturity and liquidity rate, the following data is available â A B nominal spread ...

1

85

chandniwadhwani92

Mon Oct 27, 2014 2:59 pm

portlofio

In scheswer it is given modern portfolio results in equilibrium expected returns for securities and portfolio that are linear function of each security or portfolio market risk. What does equilibrium expected return and linear fu...

1

92

chandniwadhwani92

Mon Oct 27, 2014 2:38 pm

portlofio

Relation between risk, return and voltality in portfolio????????

2

97

chandniwadhwani92

Mon Oct 27, 2014 2:13 pm

portlofio

How diversification decrease the volatility of return in portfolio?????????/

1

80

mehak.officiallink

Sun Oct 26, 2014 12:57 pm

Quantitative methods : common probability distributions

Q5 of common probability distributions CFA institue book pg 529 : Should the probability of success be taken as "what was observed, i.e. 4/7" or "what is claimed by the newsletter i.e. 70 percent" ? And why ?

1

115

anbu.edu

Sat Oct 25, 2014 5:56 pm

FRM II- OR EDU Q3

In the Internal Models Approach, an exception occurs when an actual P&L results exceeds the VaR forecast. How many times may this occur before the model falls into the penalty "Red Zone"? Select one: a. 4 times a yea...

1

87

anbu.edu

Sat Oct 25, 2014 5:41 pm

FRM II-OR EDU Q2

Which of the following is NOT a source of model risk? Select one: a. Minimal rounding errors from algorithms. b. Nonsynchronous data. c. Widespread implementation of models across business units. d. Failure to recalibrate models ...

1

88

anbu.edu

Fri Oct 24, 2014 8:11 am

FRM II-mock

67 Bank has a portfolio of derivatives on stock S as under: i .5000 deep out of money call options ii . 15000 deep in the money call options iii . 7000 forward contracts Which one of the following is closest to the correct estimat...

1

98

anbu.edu

Fri Oct 24, 2014 8:00 am

FRM II-mock

A hedge fund has invested fund worth USD 1 Million in shares .The weekly return of the share has volatility of 1%. The bid ask Spread is averaged at 0.20. What is 95% liquidity adjusted daily VaR for this position using constant s...

2

106

anbu.edu

Thu Oct 23, 2014 6:31 pm

FRM II-CR ECU 4

Which of these statements is most closely associated with âRing Fencingâ? Select one: a. It is useful when a high quality firm is looking to enter into a low quality project b. A subsidiary can be allowed to gain a higher cred...

1

98

anbu.edu

Thu Oct 23, 2014 11:04 am

FRM II- RM EDU Q3

Which of the following is the transaction cost? Select one: a. Cost of moving Portfolio allocation. b. Cost of adjusting active risk aversion. c. Cost of active portfolio management d. None of these. Feedback The correct answer is...

1

97

anbu.edu

Thu Oct 23, 2014 11:03 am

FRM II-RM EDU Q3

Which of the following is similar to Sharpe ratio: Select one: a. M2 measure b. Treynor measure c. Jensenâs alpha d. None of above Feedback The correct answer is B. Treynor measure is similar to Sharpe ratio, It uses beta instea...

1

94

tell2rekha

Wed Oct 22, 2014 5:59 pm

Explanation for the solution of this question

Sam, an analyst at Alpha Catalyst fund, finds out the following statistics based on historical data. Only 20% of subsidiaries of Alpha Catalyst are in the âElite listâ published by their newsletter. The rest of subsidiaries ar...

1

77

chandniwadhwani92

Tue Oct 21, 2014 8:35 pm

Fixed income instrument

Stock index future A long stock index futures position o s$p index 500 futures at 1051 would show a gain of 1750 in traders account if he index were 1058 at settlement date (250*7=1750). Why did they multiplied with ?

1

93

chandniwadhwani92

Tue Oct 21, 2014 8:31 pm

Fixed income instrument

What does this means?? Treasury bills are quoted as percent and fraction of 1%(measured in 1/32) of face value

2

106

chandniwadhwani92

Tue Oct 21, 2014 7:00 pm

Fixed income instrument

scheswer 166 page What does this sentence means? The margin percentage, The percentage of security value that is owned, vary over the time ad must be maintained at some minimum percentage of market value

1

107

chandniwadhwani92

Tue Oct 21, 2014 6:51 pm

Fixed income instrument

In scheswer page 167 it is given In security market cash deposited is paid to the seller of the security.with the balance of the purchase provide by the broker. This is why unpaid balance is a loan, with interest charged on buyer...

1

89

anbu.edu

Mon Oct 20, 2014 12:51 pm

FRM II-CR 10

Acme Bank has entered into two trades with its counterparty and wants to analyze the potential benefits of netting. To do this, it will model several scenarios to produce mark-tomarket (MtM) values for each trade. Their model cont...

1

106

anbu.edu

Sun Oct 19, 2014 10:42 am

FRM II-CR 12

Gregory gives the following approximation for expected exposure (EE) when the mark-tomarket (MtM) is characterized by a normal distribution with zero mean:Assume an exposure is normally distributed with zero mean and volatility of...

1

113

alkash.ghai

Fri Oct 17, 2014 3:34 pm

EXPOSURE AT DEFAULT CALCULATION -FRM 2

Can anyone explain in excel sheet how exposure at default is calculated for collateral's, equity, derivative and OTC trades like swaps and bonds.

1

158

anbu.edu

Fri Oct 17, 2014 10:09 am

FRM II-or7

In which of the following positions is the value at risk (VaR) most likely to exceed the liquidity at risk (LaR)? a) Short-term exposure on a portfolio of long European-style options b) Long-term exposure on a portfolio of short E...

1

99

alkash.ghai

Fri Oct 17, 2014 5:02 am

VAR CALCULATION USING MONTECARLO SIMULATION

Can anyone share excel sheet of calculation of VAR for any asset class by using Monte Carlo Simulation Method.

4

167

aroranidhi2004

Thu Oct 16, 2014 4:54 pm

Question on CFF and CFO for zero coupon bond

Why proceeding in the question below are in CFF and not in CFO Nomad Company issued $1,000,000 face value 2-year zero coupon bonds on December 31, 20X2 to yield 8% interest. Bond proceeds were $857,339. In 20X3 Nomad recorded in...

1

129

babita.vba

Thu Oct 16, 2014 12:02 pm

How to convert discrete variable into continous variable ? (

I want to know how to convert discrete variable into continuous variable correctly and secondly will it be good to convert for regression model or any other model. what will be the effect on model? if someone can correctly explai...

1

122

anbu.edu

Wed Oct 15, 2014 6:05 pm

FRM II-CR 3

In the Merton model, with only debt and equity in the capital structure, the value of debt will decrease and the value of equity will increase if the: I. interest rate increases. II. volatility of firm value increases. III. value ...

3

139

chandniwadhwani92

Wed Oct 15, 2014 12:50 pm

Fixed income instrument

In schsewer it is given Future contract are said to have zero value at the tym of entering into the contarct How it is zero value? Bcoz we know when we enter into a contract we share some part of intial margin

1

120

chandniwadhwani92

Tue Oct 14, 2014 7:17 pm

DERIVATIVES

Payment to the Long at Expiry= Notional*(Rate at Settlement - FRA Rate) (days/360)/1 (Rate at Settlement days/360) In this rate at settlement would be T9 OR T3 If at T9= 4% T6= 6% T1= 5% FRA RATE IS 5.5%

1

119

chandniwadhwani92

Tue Oct 14, 2014 6:32 pm

DERUVATIVES

In forward rate agreement at T1 when buyer asked for loan 3 months from now for 6 months at 5,5% At ti libor is 5% but at t3 libor increases to 6% In this case how to calculate profit for long position at T9 when at T9 libor is ...

1

114

chandniwadhwani92

Tue Oct 14, 2014 6:30 pm

DERUVATIVES

In forward rate agreement at T1 when buyer asked for loan 3 months from now for 6 months at 5,5% At ti libor is 5% but at t3 libor increases to 6% In this case how to calculate profit for long position at T9 when at T9 libor is ...

1

108

mehak.officiallink

Mon Oct 13, 2014 3:14 am

Covered calls : Level 1

The value of the covered call is value of the underlying plus the value of short call. In case the short call is exercised, the asset will have to be delivered , then why do we add the value of the underlying in determining the va...

1

130

mehak.officiallink

Sun Oct 12, 2014 3:29 pm

Effect of cash flows on underlying asset

If there is a cash flow on underlying asset, why is its present value subtracted from the price of the underlying in finding out the lower bounds ... ?

1

136

mehak.officiallink

Sun Oct 12, 2014 1:44 pm

Lower bound : American call

Lower bound for american call : Max(0, S-X/(1+r)^t) The doubt is that american option can be exercised immediately, then why are we discounting X ? Why is it simply not S-X ?

1

131

amantulsian007

Sun Oct 12, 2014 11:02 am

Ethics of Independence and Objectivity

What if the Company Handbook does not provide any information about the amount up to which the gifts can be accepted. Then if the price of gift is too low like Rs10. Then do we inform the supervisor before accepting the gift and w...

1

127

chandniwadhwani92

Sun Oct 12, 2014 7:40 am

Fixed income instrument

Difference between annualized effective yield and annualized add on yield

1

140

chandniwadhwani92

Sun Oct 12, 2014 7:37 am

Fixed income instrument

Difference between equivalent add on yield and effective add on yield. Plz clear dis doubt with example What is difference between bond equivalent yield and bond annualized yield

1

140

chandniwadhwani92

Thu Oct 09, 2014 8:15 am

NEED REPLY

plz someone help i need replies of my last questions

1

338

chandniwadhwani92

Tue Oct 07, 2014 5:54 pm

Fixed income instrument

Wat does this means??????? Money duration of per 100 of bonds par value

3

352

chandniwadhwani92

Tue Oct 07, 2014 3:47 pm

Fixed income instrument

In schweser it is given betwwen coupon dates Maclauy duration of bond decreases with passage of time and goes back significantly at each coupon dates what does this line means

1

273

chandniwadhwani92

Tue Oct 07, 2014 3:23 pm

Fixed income instrument

Difference between modified amnd nacmacaulay duration

1

298

chandniwadhwani92

Tue Oct 07, 2014 3:18 pm

Fixed income instrument

In schweser it is given that modified duration is a linear extimate of relation between bond price and ytm?????? What does linear extimate means? What is an exact difference between modified duration and approximate modified dura...

1

305

anbu.edu

Mon Oct 06, 2014 6:04 pm

FRM II-MR 17

Principal-only strips are: A) sold at par. B) sold at a considerable discount to par. C) sold at a considerable premium to par. D) could be sold at a discount or a premium, depending on economic conditions. Your answer: C was inco...

1

263

chandniwadhwani92

Mon Oct 06, 2014 5:17 pm

Fixed income instrument

COUPON PAYMENT ARE REINVESTED AT MARKET RATE OR YTM

1

267

chandniwadhwani92

Mon Oct 06, 2014 8:00 am

Fixed income instrument

What is amortization of premium and discount???????

1

248

chandniwadhwani92

Mon Oct 06, 2014 7:59 am

Fixed income instrument

ABC corp is quoted with a YTM of 4% on a semi-annual bond basis. What yields should be used to compare it with a quarterly pay bond and an annual pay bond. Concept Not getting. How to solve?????? 1 + YTM1 / n ) ^ n = (1 + Y...

3

274

anbu.edu

Sat Oct 04, 2014 4:22 am

FRM II-or9

Which of the following sources of model risk results from making a mistake in implementing the model? I. Implementation risk. II. Calibration error. III. Programming errors. IV. Data problems. A) I, II, and III only. B) I, III, an...

1

257

anbu.edu

Sat Oct 04, 2014 4:20 am

FRM II-or 9

Which of the following sources of model risk suggest a poor match of the model to the risk? I. Incorrect model specification. II. Incorrect model application. III. Implementation risk. IV. Programming errors. A) I and II only. B) ...

1

230

anbu.edu

Thu Oct 02, 2014 7:42 am

FRM II-OR 5

Which of the following statements does NOT adequately describe economic capital? I. It is always less than regulatory capital. II. It differs depending on the type of borrower, independent of borrower risk. III. It must be conside...

1

269

skmittal1979

Mon Sep 29, 2014 10:38 am

Time Differnece Formula

Hi, Please suggest which formula should be used. Example if In Time : 8:10 IST Out Time: 18:20 IST Shift Timing : 9:00 Hrs Formula We can use: =Mod(Out Time-In Time,1) but it gives only positive Hrs means if a person have more t...

1

274

skmittal1979

Tue Sep 23, 2014 4:08 am

Excel Formula

My another query is that if we have two columns i.e. Number Column 1 - 10X20 Column 2 - Question: Calculation in column 2 should be 200, means 'X' convert in to '*' Regards, Shishir

1

329

skmittal1979

Tue Sep 23, 2014 4:02 am

Excel Formula

how i convert numbers in to word in excel. Exp: 51,48,241.00 this amount if i have to write in words i.e. fifty one lakh forty eight thousand two hundred forty one only Please suggest. Regards, Shishir

3

335

anbu.edu

Sat Sep 20, 2014 2:07 pm

FRM II- Important topics

Hello, As the exam is coming near, I would like to know which topic is important in FRM level 2. There are 75 topics for 80 questions, it would be a great help if someone can guide me to important topics so that I can prioritize m...

1

310

anbu.edu

Fri Sep 19, 2014 4:36 am

FRM II-OR 10

A global macro hedge fund has a large position in natural gas contracts. The fund manager has calculated the 1- day value at risk (VaR) of the position. However, given the magnitude of the position it is most likely that any liqui...

1

294

ashok.kothavle

Thu Sep 18, 2014 12:50 am

Macaulay Duration, Modified Duration and Effective Duration

Dear Forum, Need some clarification regarding duration. (A) Macaulay Duration Macaulay duration measures the average time that would be taken to receive the cashflows from the invested bond. It is the weighted average term to ...

2

363

anbu.edu

Wed Sep 17, 2014 8:03 am

FRM II-OR 4

Which of the following statements about economic capital is (are) TRUE? I. The economic capital system provides an appropriate level of capital to meet most potential disasters. II. The economic capital system ensures that the fir...

1

285

anbu.edu

Tue Sep 16, 2014 7:24 am

FRM II-CR Test 4

Using the single factor model, a firmâs conditional default distribution is calculated with mean and standard deviation equal to -0.438 and 0.683 respectively. What is the market return for that firm? Select one: a. 0.6 b. -0.6 ...

1

325

anbu.edu

Tue Sep 16, 2014 7:23 am

FRM II-CR Test 4

Which of these statements is most closely associated with âRing Fencingâ? Select one: a. It is useful when a high quality firm is looking to enter into a low quality project b. A subsidiary can be allowed to gain a higher cred...

1

324

anbu.edu

Tue Sep 16, 2014 5:51 am

FRM II-CR Test 2

12)Which of the following is not a termination provision Select one: a. Termination events b. Reset agreement c. Trade compression d. Multilateral netting Can C also be right

1

333

anbu.edu

Thu Sep 11, 2014 3:08 pm

FRM II-CR 19

Which of the following is NOT an example of overcollateralization as an internal credit enhancement for securitization? I. Direct equity issue. II. Holdback. III. Cash collateral account. IV. Excess spread. A) IV only. B) I only. ...

1

328

anbu.edu

Tue Sep 09, 2014 11:21 am

FRM II-CR 16

123.4 Assume a protection seller enters into a senior basket CDS, which in addition to covering the upper 40% in notional ($20 million) has an aggregate threshold of $10.0 million such that no payouts are triggered until the thres...

1

434

anbu.edu

Mon Sep 08, 2014 11:37 am

FRM II-CR 5

Credit value at risk (VaR) incorporates potential losses at a future date at a given probability. Credit VaR is typically defined in terms of unexpected loss as: A) the worst-case portfolio loss at a given confidence level over a ...

1

401

anbu.edu

Mon Sep 08, 2014 6:39 am

FRM II-MR 17

Which of the following statements regarding principal-only (PO) and interest-only (IO) strips is (are) CORRECT? I. The IO price is positively related to mortgage rates at low current rates. II. The IO exhibits some negative convex...

1

390

anbu.edu

Mon Sep 08, 2014 6:28 am

FRM II-MR 17

Principal-only strips are: A) sold at par. B) sold at a considerable discount to par. C) sold at a considerable premium to par. D) could be sold at a discount or a premium, depending on economic conditions. Your answer: The corre...

1

393

anbu.edu

Sat Sep 06, 2014 6:58 pm

FRM II-MR 3

Two bonds each have the same marginal (unconditional) probability of default (PD) equal to 2.0%. If they are independent, their joint PD is 0.04% which is the product of 2.0% multiplied by 2.0%. However, assume we employ a Gaussia...

0

397

skmittal1979

Fri Sep 05, 2014 4:59 am

Index Formula

I want to know the Index formula and its use

2

407

skmittal1979

Wed Sep 03, 2014 7:03 am

FRM 30th August Batch

I want to know the CAGR formula and its use. Shishir

1

473

mehak.officiallink

Mon Sep 01, 2014 11:28 am

CFA Level 1: Preparation

While going through the questions at the end of each reading, i found some questions aiming to test the exact wordings of the reading . Are the main exams too like that ?

1

453

mehak.officiallink

Mon Sep 01, 2014 11:26 am

Preparation : CFA level 1

Should we start practicing the questions only once we are absolutely thorough with the readings ?

1

452

mehak.officiallink

Sat Aug 23, 2014 7:47 pm

CFA level 1 : fixed Income : pg 407 of CFA text book

Why is using the spot rate better discount rate than Yield to Maturity in calculating the price of the bond ? "Spot rates are yield to maturity on zero coupon bonds maturing at the date of each cash flow" please explain ...

1

532

mehak.officiallink

Sat Aug 23, 2014 7:33 pm

CFA level 1 : Fixed income

Why is it that lower the coupon rate more is the percentage change in the value of the bond ? Why is that more the maturity period more is the percentage change in the value of the bond ? (Relationship between bond price and bond ...

1

503

anbu.edu

Thu Aug 21, 2014 8:49 am

FRM II-RM3

Which of the following best describes marginal risk for a portfolio? It is the: A) dollar change in portfolio VaR from an additional investment. B) per unit change in portfolio risk from an additional investment. C) dollar change ...

1

525

anbu.edu

Thu Aug 21, 2014 8:45 am

FRM II-RM3

Which of the following is the best interpretation of incremental VaR? A) It is the VaR for the first step into the tail beyond the VaR level. B) It is the VaR for liquidating a position in increments. C) It is the amount of risk a...

1

499

anbu.edu

Wed Aug 20, 2014 7:56 am

FRM II-CR 18

Securitization of trade receivables transfers which risk(s)? A) Credit risk. B) Market risk. C) Credit and market risk. D) Credit, market, and operational risk. The correct answer was A) Credit risk. By monetizing the asset, the ...

1

500

prernakhatri01

Sat Aug 16, 2014 5:20 am

Bangalore Level 1 - Dec 2014

Is there anyone preparing from Bangalore for December 2014, level 1 attempt and willing to do group study on weekend. Preferable area - Near Koramangala. Thanks

1

574

anbu.edu

Thu Aug 14, 2014 8:08 pm

FRM II-CR 11

With regard to lessening and calculating credit exposure, which of the following parameters is most likely referred to as the âinitial marginâ? A) Independent amount. B) Minimum transfer amount. C) Threshold amount. D) Roundin...

1

667

anbu.edu

Tue Aug 12, 2014 8:22 pm

FRM II-CR 7

Assuming a specific value for the market parameter, which of the following is an implication of the single-factor model for assessing the impact of varying default correlations based on a credit positionâs beta? A) If the market...

0

636

neha.kapoor318

Mon Aug 11, 2014 3:03 pm

Corporate Finance

An Investment has an outlay of 100 and after tax cash flows of 40 annually for four years.A project enhancement increases the outlay by 15 and the annual after cash flows by 5. As a result , the vertical intercept of the NPV profi...

1

666

neha.kapoor318

Mon Aug 11, 2014 6:20 am

Corporate finance

Wilson flannery is concerned that this project has multiple IRRs. Year 0 1 2 3 Cash Flows -50 ...

2

647

neha.kapoor318

Mon Aug 11, 2014 6:14 am

Corporate Finance

Consider the two projects below. The cash flows as well as the NPV and the IRR for the two projects are given. For both projects, the required rate of return is 10 %. Year 0 1 2 ...

1

651

neha.kapoor318

Mon Aug 11, 2014 6:04 am

Corporate Finance

An Investment has an outlay of 100 and after tax cash flows of 40 annually for four years.A project enhancement increases the outlay by 15 and the annual after cash flows by 5. As a result , the vertical intercept of the NPV profi...

3

663

neha.kapoor318

Mon Aug 11, 2014 5:24 am

Corporate Finance

Trumpit Resorts Company currently has 1.2 million common shares of stock outstanding and the stock has a beta of 2.2. It also has $10 million face value of bond that have five years remaining to maturity and 8% coupon with semi-an...

1

722

neha.kapoor318

Mon Aug 11, 2014 4:54 am

Corporate Finance

Dot com has determined that it could issue $1000face value bonds with an 8 percent coupon paid semi annually and a five year maturity at $900 per bond. If Dot com's marginal tax rate is 38%, it's after tax cost of debt is closest ...

1

630

anbu.edu

Sun Aug 10, 2014 6:28 am

FRM II-MR EDU practice q2

Which of the following factors are generally considered to affect the prepayment risk for the mortgage? I. Changes in interest rates II. Principal Outstanding Select one: a. I only b. II only c. Both d. Neither Can you please exp...

1

651

anbu.edu

Sun Aug 10, 2014 6:22 am

FRM II-MR EDU practice q1

Mortgage Based Securities were a hit because; Select one: a. Conventional financial instruments became risky investments b. They always offered higher rate of interest than conventional financial instruments c. They offered calcul...

1

696

Ryan

Wed Aug 06, 2014 7:40 am

Rules for working with Prime FMS

I invite you to cooperate: to assemble a team of traders to trade with a proven broker [url=http://www.edupristine.com:2ygqq1pc]Prime FMS[/url:2ygqq1pc] on spetsialnyeh conditions. Spend training to work on cross-cu...

1

857

anbu.edu

Tue Aug 05, 2014 3:40 pm

FRM II-MR 20

when the yield is higher than the coupon bond rate of MBS, the MBS behaves similar to corporate bonds as interest rate changes. Can you please explain this statement..

1

612

basanimaryprasanna

Mon Aug 04, 2014 10:00 am

what is CAGR in financial modeling

what is the meaning of CAGR in financial modeling.

1

648

anbu.edu

Mon Aug 04, 2014 7:36 am

FRM II-MR 15

Hi guys i have a doubt in chapter 15 overview of the MBS mkt In that i am unable to understand dollar roll market.. can anyone please explain

1

642

Anna

Sun Aug 03, 2014 5:36 am

Prime FMS review broker London

Become a partner leader - earn the team! Prime FSM progressive gang , which systematically provides for the development and success of its partners and customers .

1

969

anbu.edu

Fri Aug 01, 2014 2:46 pm

FRm2-MR 11

45.2 Assume that change to up-state (u) = + 20 bps and change to down-state (d) = -10 bps in a recombining binomial interest rate tree where p = 50%. The date 0 rate is 3.0%. What is the date 12, state 5 interest rate? a) 3.3% b) ...

1

683

abhishek.benjamin

Mon Jul 28, 2014 11:36 pm

Gamma Distribution: Parameter Determination !!

Hi !! Just wanted to ask one question with regards to Gamma Distribution topic in Business Analytics Course: Chapter 3 & Topic 9. For a Random Values X, representing Losses, we have chosen Alpha= 2 & Beta=3, shown as Ga (...

0

626

nripraj.2001

Thu Jul 24, 2014 7:01 am

Question on Skewness and Kurtosis calculations

A bond has a default probability of 5%. Which is nearest to the Skew(S) and Kurtosis(K) of the distribution? a) S=0.0, K=2.8 b) S=0.8, K=-7.5 c) S=4.1, K=18.1 d) S=18.9, K=4.2

1

851

nripraj.2001

Thu Jul 24, 2014 6:59 am

Coskewness and Cokurtosis

The GARP study material mentions about Non Trivial Cross Moments. What does this mean?

1

745

ashok.kothavle

Mon Jul 21, 2014 9:56 am

FRM - 1 : Kurtosis and Curve Shape for Leptokurtic , Mesokur

Hi Yesterday during the lecture we were informed that Leptokurtic has peak higher than the Mesokurtic (i.e. Normal distribution) curve and has fat tails while Platykurtic curve has peak smaller than Normal curve and has thinner ta...

2

742

anbu.edu

Sat Jun 28, 2014 10:24 am

FRM II-MR

With all other things being equal, a risk monitoring system that assumes constant volatility for equity returns will understate the implied volatility for which of the following positions by the largest amount: Select one: a. Shor...

1

658

alwaysenjoy.indu

Sat Jun 28, 2014 2:41 am

Fixed Income Analysis

Problem : Calculate the value of a bond, that would pay you $50 every year, starting from a year from now, for the next 3 years and would pay you a sum of $1000 at the end of 3 years. The appropriate discounting factor is 10% My ...

1

705

alwaysenjoy.indu

Fri Jun 27, 2014 6:40 pm

Fixed Income analysis

What is the term Basis Points or Margins are referred to in Floating Rate Bonds ? How do we get that ?

1

668

anbu.edu

Thu Jun 26, 2014 7:34 pm

FRM II-MR 4

84.3 Two bonds each have the same marginal (unconditional) probability of default (PD) equal to 2.0%. If they are independent, their joint PD is 0.04% which is the product of 2.0% multiplied by 2.0%. However, assume we employ a Ga...

0

681

alwaysenjoy.indu

Wed Jun 25, 2014 6:56 pm

Fixed Income analysis - Structure of Bond market

Before I proceed for further classes in Fixed Income Analysis program, I would like to understand the following â¢Basic structure of Bond and Who are the participants or players of the Bond market in real time scenarios? â¢As ...

2

675

anbu.edu

Mon Jun 16, 2014 7:12 pm

FRM 2- MR11

43.2 Assume a binomial interest rate tree with six steps. At the initial node (T0), the rate is 5.0%. The probability of an up-jump to the up-state is 60% (p = 0.6). The magnitude of an up-jump is +50 basis points; the magnitude o...

3

701

parasgrover91

Mon Jun 09, 2014 5:29 pm

FMCG Case study

In file "Q_Valuation_Case_v11" of FMCG case study, we have done relative valuation on "comps" sheet. But I don't understand why we have taken value of net debt as given for the year 2009 to calculate share pric...

1

640

neha.kapoor318

Sun Jun 08, 2014 3:42 am

Capital Budgeting (Corporate Finance)

Q2. An investment has an outlay of 100 and after tax cash flows of 40 annually for four years. A project enhancement increases the outlay by 15 and the annual after tax cash flow by 5 . As a result the vertical intercept of the NP...

1

680

neha.kapoor318

Sun Jun 08, 2014 3:20 am

Corporate Finance (Capital Budgeting)

I have doubts in few of the questions listed below request the faculty to please expalin the reasons for them. Q1. Erin Chou is reviewing a profitable investment project that has a conventional cash flow pattern if the cash flow ...

1

617

davidblumberg54

Thu May 29, 2014 12:37 am

Week 3 Financial Modeling cost build up

Paramdeep I assume by RM you are talking about finished goods. I have to go back and review but where are beginning / end of the period inventories considered? You appear to be only looking at sales of inventory. Historical R...

1

616

aniket.valsangkar

Wed May 28, 2014 3:03 pm

Derivatives and secondary market

1) How are long and short postions defined in call and put options....and why? 2)how currency swap can help prevent against financial turmoil for a country beset by liquidity crisis? 3)After the initial capital is raised by a comp...

1

566

aniket.valsangkar

Mon May 26, 2014 3:00 am

Macro Economics and Equity securities

1) What is the basic difference between primary and secondary market? Ca you give an example 2)if deficit financing increases the interest rates increases....but what s the logic behind this 3)can u elaborate on "ipo is only ...

1

527

devinarastogi84

Fri May 23, 2014 5:44 am

Bond duration

Ina question , Royal Bank has a par position in a 5 year, 0 coupon bond that has a Market value of 19059948. The modified dutaion will be? In the solution, for calculating YTM N=10 is used, y? while its a 0 coupon bond and then fo...

1

475

devinarastogi84

Fri May 23, 2014 5:31 am

Bond duration

what will be the formula for modified duration for 0 coupon bond? MD*= D/ (1+YTM) or MD*= D/(1+(YTM/2)) In a previous coming paper solution, for 0 coupon bond the formula used is D/(1+(YTM/2)). why its YTM/2 when bond is 0 coup...

1

418

devinarastogi84

Sat May 17, 2014 11:59 am

Forward contact

The current spot price for iron is $0.485/pound. The annual risk-free rate is 4.5% and the cost to store and insure iron is $0.008/pound/month. A 3 month forward contract for iron is trading at $0.524/pound. What will be the amoun...

1

465

devinarastogi84

Sat May 17, 2014 10:26 am

Short rate calculation

A firm XYZ is investing $10 million for 5-year term at 5.5%. Another firm PQR is investing $11 million for 2 years at the 2-year short rate, 4%, and then reinvesting the proceeds for 3 years at the short rate R%. If both the firms...

1

460

rinky63a

Fri May 16, 2014 3:39 pm

Netting agreement

(1) 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 ...

1

413

aniket.valsangkar

Thu May 15, 2014 1:03 pm

Macro Economics and Equite securities

1) what is the link between deficit financing and increase in interest rates for a country 2)How to buy the shares of private company? Is an IPO the only way to buy shares for common public 3)what will happen to the coupen rate if...

2

490

rinky63a

Thu May 15, 2014 10:49 am

Credit exposure

(1) For a 10 year, $100 million notional amount, which one of the following swap position has the highest potential future credit exposure at the time specified ? (a) Currency swap 3 yrs after inception. (b) Currency swap 5 yrs a...

2

519

agrawal.caamit

Thu May 15, 2014 9:47 am

Var

Bank has a portfolio of derivatives on stock S as under: i .5000 deep out of money call options ii . 15000 deep in the money call options iii . 7000 forward contracts Which one of the following is closest to the correct estimation...

1

470

sushant.panda

Wed May 14, 2014 7:53 am

Query on historical simulation

Rational investment Inc. is estimating a daily VaR for its fixed income portfolio currently valued at USD 800 million. Using returns for the last 400 days (ordered in decreasing order, from highest daily return to lowest daily ret...

1

498

anirban.dutta

Mon May 12, 2014 8:15 am

Interest Rate Swap - Mock Test - II, Q#: 94

A bank had entered into a 3-year interest rate swap for a notional amount of USD 300 million, paying a fixed rate of 7.5% per year and receiving LIBOR annually. Just after the payment was made at the end of the first year, the con...

1

7253

anirban.dutta

Mon May 12, 2014 8:09 am

Forward Rate Agreement - Mock Test - II, Q#: 71

Suppose an FRA is 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. Options: A...

2

465

anirban.dutta

Mon May 12, 2014 8:05 am

Semi-Standard Deviation - Mock Test - II, Q#: 38

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 of the portfolio. Options: A. 8.2% B. 14.2% C. 0.4% D. 13.38%

1

805

anirban.dutta

Mon May 12, 2014 8:02 am

Accrued Interest and Dirty Price - Mock Test-II, Q# 17.

Suppose that it is April 4, 2011 and there is a bond with 9% coupon maturing on July 20, 2015 with a quoted price of 90-16 or $90.50. The most recent coupon date is January 20, 2011, and the next coupon date is July 20, 2011. It i...

1

501

anirban.dutta

Mon May 12, 2014 6:42 am

Option Trading Strategies - Mock Test - II, Q#: 4.

The tock price of a US company is$42 and the call option on the stock having a strike price at $44 is trading at $3. The call expires in a year. A put option having the same exercise price and expiration date is priced at $25. Ass...

1

1170

anirban.dutta

Mon May 12, 2014 4:11 am

Bond Price and Duration

A 5-year bond with a yield of 11% (continuously compounded) pays an 8% coupon at the end of each year. a) What is the bond's price? b) What is the bond's duration? c) Use the duration to calculate the effect on the bond's price of...

1

1635

anirban.dutta

Mon May 12, 2014 4:00 am

Implied Forward Rates

Suppose that the 6-month, 12-month, 18-month, and 24-month zero rates are 5.0%, 6.0%, 6.5%, and 7.0%, respectively. What is the 2-year par yield?

1

448

sessiljoseph

Sun May 11, 2014 5:26 am

var topic from swescheser

you are the risk manager of a fund you are using the historical method to estimate Var.You find that the worst 10 daily returns for the fund over the period of last 100 trading days are-1%,-0.3%,-0.6%,-0.2%,-2.7%,-0.7%, -2.9%,-0.1...

1

412

sessiljoseph

Thu May 08, 2014 8:51 am

duration

A bond portfolio manager makes the following two statements: I. "We hedged our bond position (B), which has a duration of 6.5 years, with the hedge portfolio (H), which also has a duration of 6.5 years. Therefore, if interest...

1

393

sessiljoseph

Wed May 07, 2014 7:42 am

caplets

for a five year ATMcap on the 3 month LIBOR,what can be said about the individualcaplets in a downward sloping term structure enviornment a, the short maturity caplets are ITM, long maturity caplets are otm the short maturity capl...

1

410

sessiljoseph

Tue May 06, 2014 9:44 am

Forward rate agreement

consider the buyer of a 6*9 FRA.the contract rate is 6.35%on a notinal amount of 10million$.calculate the settlement amount of the seller if settlement rate is 6.85% assume a 30/360 days a. -12,500 -12,290 +12500 +12290 can u plea...

1

403

agrawal.caamit

Mon May 05, 2014 8:27 am

credit risk

Credit spread option has a notional amt of $50 mn wid a maturity of 1 yr. the underlying security is a 10 yr, semiannual bond with a 7% coupon and a $ 1000 FV. the current spread is 120 basis point against 10 yr treasury. the opt...

2

485

agrawal.caamit

Mon May 05, 2014 8:20 am

credit risk

As per Moody, the 5 yr cumulative probability default for AAA rated debt is 15%. If marginal probability of default for AAA debt from yr 5 to yr 6( Conditional on no prior default) is 10%, then what is the 6 YR cumulative probabi...

2

431

agrawal.caamit

Mon May 05, 2014 8:16 am

credit risk

A portfolio consist of two long asset £100 million each.probability of default over next yr is 10% for 1st asset, 20% for 2nd asset nd joint probability of default is 3% . Estimate d expected loss on dis portfolio due to credit d...

2

466

sessiljoseph

Fri May 02, 2014 12:49 pm

contangno and backwardation

Which of the following is TRUE about a normal/inverted futures market? a) A futures market is either normal or inverted but cannot be a mixture b) The roll return (roll yield) is profitable to a long futures position during an inv...

1

431

sessiljoseph

Fri May 02, 2014 10:18 am

duration and dvo1

True or false: For a zero-coupon bond, duration is a monotonically increasing function of maturity. True or false: For a zero-coupon bond, DV01 is a monotonically increasing function of maturity.

1

417

devinarastogi84

Thu May 01, 2014 8:22 pm

Futures

September futures contract on TCS closed at Rs. 2066 on August 16 and at Rs. 2062 on August 17, 2009. Ravi has a short position of 3000 in the September futures contract from August 16. On August 17, 2009, he sells 2000 units of 1...

1

432

devinarastogi84

Thu May 01, 2014 6:38 pm

Foreign Exchange

Currency Bid Offer CAD 1.5599 1.5604 JPY 117.50 117.60 Question: What if the customer wants to sell JPY for CAD?? Here It should be first Sell JPY for USD: USD/JPY= 1/117.60 then Sell USD for CAD: CAD/USD: 1.5569 So, CAD/JPY =...

4

438

sessiljoseph

Thu May 01, 2014 1:10 pm

bullet and barbell portfolio

If there is a SMALL parallel shift in the yield curve, how does their performance compare? a) Barbell outperforms bullet b) Bullet outperforms barbell c) Same or similar d) Need more information

1

389

sessiljoseph

Thu May 01, 2014 8:14 am

to find dv01

Assume a ZERO-COUPON bond with par value of $100 an yield (YTM) of 6%. . If the maturity is twenty years (20 years), find the DV01. how can u solve this problem my another doubt is will maculay duration of a zero coupon par bond...

1

412

devinarastogi84

Wed Apr 30, 2014 5:11 pm

Calculation of YTM by using PRM allowed calculator-TI -30XS

How do we calculate YTM by putting all other variables by using TI 30XS calculator, I cant see FV, PMT and N variables in this calculator. Please advice.

5

791

sessiljoseph

Wed Apr 30, 2014 11:10 am

widening of credit spread

Which of the following is most likely to cause an increase (i.e., widening) in a corporate bond credit spread? a) Economic expansion in the business cycle b) Increase in the bondâs liquidity c) Flight to quality d) Addition of e...

1

413

sessiljoseph

Wed Apr 30, 2014 11:08 am

interest rate parity

If currency futures are quoted in US dollars per unit of foreign currency, and if foreign exchange futures prices are increasing with maturity, what does interest rate parity (IRP) imply? a) US risk interest rates are greater than...

1

394

sessiljoseph

Wed Apr 30, 2014 11:06 am

Forward rate agreement

consider the buyer of a 6*9 FRA.the contract rate is 6.35%on a notinal amount of 10million$.calculate the settlement amount of the seller if settlement rate is 6.85% assume a 30/360 days a. -12,500 -12,290 +12500 +12290 can u plea...

1

387

sessiljoseph

Wed Apr 30, 2014 6:19 am

foundation of risk

for the past 4 yrs companyA has been outperforming company B the corporategovernance model of company a is well respected among investors at present company A is trying to take over company B the probability that company A would b...

1

386

sessiljoseph

Wed Apr 30, 2014 5:57 am

foundation of risk

relationship between cyclic nature and Bi,m for CAPM model a. Bi,m<0 implies that asset A and market returns are complementary b. Bi,m>1 implies that asset A and market returns are complementary c. Bi,m<1 implies that th...

1

344

devinarastogi84

Mon Apr 28, 2014 5:29 pm

option Pricing

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

1

394

sessiljoseph

Mon Apr 28, 2014 7:19 am

risk adjusted discount rate

the risk free rate for an investment is 5.55 and the market risk premium is 6% the beta value for the asset is 1.8 which has a capital structure of 60% debt with a default spread of 8% calculate the certanity equilavents for 2yrs ...

3

430

sessiljoseph

Mon Apr 28, 2014 7:12 am

risk adjusted discount rate

a global investor decides to invest in india with arisk premium of 5% india seems to be the choice for this risk investor the investor picks up a firms asset for investment, the firm has a default spread of 1.6% and a t-bill rate ...

3

391

sessiljoseph

Mon Apr 28, 2014 7:00 am

caluculate present value

Firm a is supposed to grow at 5%,the dividened it paid earlier this year per share held was 1$.estimate the present value of one stock if it is till perpetuity, if required cost of capital is 10%

1

416

mehak.officiallink

Sat Apr 19, 2014 4:06 pm

cFA level 1 : probability

What is the difference between joint probablility and conditional probability ? In other words what is the difference between Stock earns a return above risk free GIVEN that stock earns a positive return (CONDITIONAL PROBABILIT...

1

402

saad.a15

Fri Apr 18, 2014 10:16 am

valuation

why we add debt to market value of equity to find enterprise value? How should we value a private firm which is not listed (since we cannot find Beta) using DFC valuation?

1

795

devinarastogi84

Fri Apr 18, 2014 4:42 am

Convexity

What is the percentage change in price of a bond if there is decrease of 50 bps in yield, and the modified duration of the bond is 8.5 with convexity of 350? What formula and logic will be used , Please explain in detial to solve...

2

423

mehak.officiallink

Sun Apr 06, 2014 8:11 am

Cfa level 1 derivatives

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 ?

1

404

kaushalya.narendran

Sat Apr 05, 2014 3:04 pm

FRM L-1 (VRM)

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

1

428

mehak.officiallink

Tue Apr 01, 2014 4:00 am

Cfa level 1 derivatives

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

1

388

mehak.officiallink

Sun Mar 30, 2014 1:29 pm

cfa level 1 books- change in syllabus

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

2

1075

mehak.officiallink

Sun Mar 30, 2014 1:26 pm

time to maturity affecting bond value

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

1

349

mehak.officiallink

Sun Mar 30, 2014 1:26 pm

time to maturity affecting bond value

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

1

353

shruti.madani

Fri Mar 28, 2014 12:09 pm

looking for study partner through Skype for cfa level1

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

1

423

alkash.ghai

Wed Mar 26, 2014 1:04 pm

VAR Stress and Back Testing using Excel

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 ?

1

690

alkash.ghai

Tue Mar 25, 2014 4:49 pm

Buys Side Vs Sell Side Functional Query

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...

2

937

neerajmangal18

Sat Mar 15, 2014 7:23 pm

found some issue in recordings for CCRA

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..

1

356

thomas.dallagnese

Sat Mar 15, 2014 11:48 am

Var aX bY in PRM-I Portfolio Mathematics

PRM-I, Finance Theory ⺠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...

1

335

singhal.anuj

Tue Mar 11, 2014 11:46 am

Availability of Normal distribution table

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...

1

430

sanju928

Mon Mar 10, 2014 10:17 am

Equity--insurance companies?

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 ...

4

445

rinky63a

Sun Mar 09, 2014 11:35 am

Netting Agreement

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...

2

403

rinky63a

Sun Mar 09, 2014 11:19 am

VAR

Pls explain below question : Which of the following is true for VaR models? Select one: a. Returns are assumed to be normally distributed b. Returns are assumed to be independent and identically distributed c. VaR usually underes...

2

342

mehak.officiallink

Sat Mar 08, 2014 7:08 am

exam preparation

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...

2

318

mehak.officiallink

Sat Mar 08, 2014 7:06 am

exam preparation

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...

3

338

mehak.officiallink

Sat Mar 08, 2014 7:00 am

net asset value

How is NAV calculated in mutual funds ?

1

272

anbu.edu

Thu Mar 06, 2014 12:01 pm

FRM part II- market Backtesting

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...

1

310

anbu.edu

Tue Mar 04, 2014 6:05 pm

FRM part II-market Drifts

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...

1

289

anbu.edu

Sun Mar 02, 2014 11:54 am

FRM part II-market Vol smile

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

2

324

anbu.edu

Sun Mar 02, 2014 8:20 am

FRM part II-market exotic options

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...

2

313

anbu.edu

Sun Mar 02, 2014 7:43 am

FRM part II

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

2

314

anbu.edu

Sun Mar 02, 2014 5:33 am

FRM 2 - Market Exotic options

Can anybody explain cliquet options with an example.

2

278

kishoreagarwal

Sat Mar 01, 2014 4:43 pm

CFA Level 2 Economics

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...

3

351

zeeshanrashid

Mon Feb 24, 2014 6:40 am

Q-bank part 2, ORM and ERM

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...

1

266

kaushalya.narendran

Tue Feb 18, 2014 8:44 am

Binomial Trees

(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...

2

352

sandipkumarshaw

Fri Feb 14, 2014 4:59 pm

quize-quants

Three traders, Amit, Balram and Chandok play a game of dice. Whoever throws a &quot;6&quot; 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. ...

1

272

anbu.edu

Sat Feb 08, 2014 2:43 am

FRM II

What do you mean by state dependent volatility? It was mentioned that non recombining BT Source form market risk measurement &amp; mang- Chapter 3 science of term st

2

302

sandipkumarshaw

Sun Feb 02, 2014 4:32 pm

quiz- probability and distribution

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...

2

301

sandipkumarshaw

Sun Feb 02, 2014 2:35 pm

quiz- probability and distribution

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...

4

330

sandipkumarshaw

Sun Feb 02, 2014 2:05 pm

quiz- probability and distribution

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...

2

290

kaushalya.narendran

Thu Jan 30, 2014 1:31 pm

Financial Markets and Products

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?

1

283

priyakamboj1985

Wed Jan 29, 2014 9:46 am

cfa- corporate finance

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

2

366

kaushalya.narendran

Sat Jan 25, 2014 3:10 pm

Interest Rate Parity

Please explain the concept of Interest Rate Parity

2

251

kaushalya.narendran

Wed Jan 22, 2014 5:30 am

Covariance

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

2

255

kaushalya.narendran

Sun Jan 12, 2014 12:54 pm

Foundations of Risk Management

'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?

2

310

havinjain1988

Sat Jan 04, 2014 3:25 pm

Leverage Ratio and Deferred Tax Liability

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 ?

2

1167

aaash.ag

Fri Jan 03, 2014 3:42 am

Clarity on Debt Service coverage ratio

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...

2

288

aaash.ag

Thu Jan 02, 2014 3:41 am

Debt Service coverage ratio

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

2

262

aaash.ag

Sat Dec 28, 2013 3:38 am

coverage ratio

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

1

241

monu.manish0

Thu Dec 26, 2013 11:01 am

CPA

somebody are taking class for CPA

2

245

aaash.ag

Mon Dec 23, 2013 3:52 am

Covenant

Need to know in detail about Covenant.What is Covenant and its significance?Also would like to know about two vital ratios -1.Debt Service Coverage and 2.Fixed Charge Coverage with formula and examples.

2

266

rinku.rohra85

Thu Dec 12, 2013 6:56 am

Hessian matrix

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

2

269

vaheem27

Tue Dec 03, 2013 9:23 am

Pitch Book

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

3

317

rinku.rohra85

Fri Nov 29, 2013 7:11 am

Eigenvalues

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 - λI) = 0 S...

2

285

rahuljagetiya

Thu Nov 28, 2013 5:34 am

Cost of equity

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 ...

2

283

rahuljagetiya

Thu Nov 28, 2013 4:47 am

Cash Flow

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...

1

280

rinku.rohra85

Wed Nov 27, 2013 3:33 pm

Eigenvector

Can anyone explain me how to calculate normalized eigenvector. Thanks

2

288

rahulgarg225

Sun Nov 24, 2013 5:05 am

Derivatives Quiz-1 Q5

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

2

322

aaash.ag

Sat Nov 23, 2013 1:38 am

working capital intensity

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

2

565

ashishsinha

Fri Nov 22, 2013 3:32 pm

Effect of increase or decrease in basis on a short and long hed

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,...

1

428

vaheem27

Thu Nov 21, 2013 4:49 am

Pre Money and Post Money Valuation

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

2

1222

nisha

Wed Nov 20, 2013 10:10 am

FRM

I have completed FRM but i m not getting job from last 6 months so you guys said that you will assist me.

2

929

satyanarayana.m

Wed Nov 20, 2013 1:14 am

feedback on frm level 1 16 nov 2013

what could be the cut off for passing the exam?

2

515

malcolm100

Mon Nov 18, 2013 3:28 pm

FRM L1 2013 question

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...

1

368

aaash.ag

Sat Nov 09, 2013 1:26 am

working capital intensity

formula to calculate working capital intensity

1

275

monsieuruzairo3

Wed Nov 06, 2013 9:27 am

Options trading with profit discounting

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...

1

303

its.ruchi2006

Wed Nov 06, 2013 6:29 am

Foundation of risk management

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...

1

271

anbu.edu

Wed Nov 06, 2013 1:46 am

VAR

A financial institution has agreed to pay 6-month LIBOR and receive 8% per annum (with semi-annual)compounding on a principal of $100 million. The swap has a remaining life of 1.25 years. The LIBOR rates withcontinuous compounding...

1

246

darshit.sr

Sat Nov 02, 2013 8:31 pm

Bond Duration

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 ...

1

264

swarnendupathak

Sat Nov 02, 2013 7:51 pm

3 Tiered Securitization Structure

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

3

242

aaash.ag

Thu Oct 31, 2013 4:46 pm

working capital

what is working capital intensity?

2

240

swarnendupathak

Fri Oct 25, 2013 4:24 pm

Credit Linked Notes

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

2

241

gobind.jain

Fri Oct 25, 2013 10:55 am

Futures

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

2

242

swarnendupathak

Sun Oct 20, 2013 6:01 pm

Vasicek Model (Interest Rate Drift)

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

4

417

kupilisashi

Sat Oct 19, 2013 6:34 am

Valuation Questions

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?

2

658

darshit.sr

Thu Oct 17, 2013 11:28 am

Quants- probability

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%...

1

317

anbu.edu

Wed Oct 16, 2013 11:54 am

FMP-Options

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?...

1

235

anbu.edu

Wed Oct 16, 2013 11:46 am

FMP-Options

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...

1

253

anbu.edu

Wed Oct 16, 2013 5:43 am

foundation

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...

1

241

anbu.edu

Wed Oct 16, 2013 5:40 am

foundation

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...

1

224

anbu.edu

Wed Oct 16, 2013 5:39 am

Yeild curve

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

1

239

anbu.edu

Tue Oct 15, 2013 1:31 pm

VAR

Does Increase in RF increase yield of the corporate bond?.. If so why?

2

227

anbu.edu

Tue Oct 15, 2013 1:30 pm

VAR

Marks: 1 Which of the following statements is/are true? I. The convexity of a 10-year zero-coupon bond is higher than the convexity of a 10-year, 6% bond. II. The convexity of a 10-year zero-coupon bond is higher than the convexit...

1

285

anbu.edu

Tue Oct 15, 2013 6:12 am

Quants

NEW Consider the following linear regression model: Y = a + b*X + e. Suppose a = 0.05, b = 1.2, Std(Y) = 0.26, Std(e) = 0.1, what is the correlation between X and Y? Choose one answer. a. 0.852 Incorrect b. 0.701 Incorrect...

1

254

anbu.edu

Tue Oct 15, 2013 5:41 am

Quants

16 Consider the following returns for the ABC Fund. Year 1: +22.7%; Year 2: +18.8%; Year 3: -2.3%; Year 4: +3.6%; and Year 5: -17.7%. If you held the fund for these 5 years, which number corresponds most closely to your annual hol...

1

237

neethur.ssai

Mon Oct 14, 2013 7:17 pm

concept of forward bucket 01

Please explain the concept with illustration

1

341

rinky63a

Mon Oct 14, 2013 12:33 pm

IRB approach

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...

1

222

anbu.edu

Mon Oct 14, 2013 12:30 pm

QUANTS

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

1

205

anbu.edu

Mon Oct 14, 2013 5:48 am

VAR

Using both RiskMetrics and historical standard deviation, calculate the K-value that equates the most recent weight between the two models. Assume λ is 0.98. A) K = 50. B) K = 30. C) K = 51. D) K = 98. (1 â λ) λt = (1 â 0...

1

206

anbu.edu

Mon Oct 14, 2013 2:28 am

FMP

In analyzing the differences between the spot price of wheat and the price of a wheat futures contracts at a given time, what causes changes in the basis? A) Changes in cost of carry of the asset. B) Price volatility. C) Basis ri...

2

220

rinky63a

Fri Oct 11, 2013 8:07 am

Netting arrangement

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...

2

689

ashishsinha

Thu Oct 10, 2013 11:23 am

Calculation of Portfolio VaR by using VaR of the individual

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...

1

322

ashishsinha

Thu Oct 10, 2013 11:03 am

Can portfolio VaR be calculated if VaR of asset is given but

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...

1

211

anbu.edu

Wed Oct 09, 2013 11:50 am

VAR

Delta-normal, historical simulation, and Monte Carlo are various methods available to compute VAR. If underlying returns are normally distributed, then Choose one answer. a. Delta-normal method VAR will be identical to the Monte...

1

237

anbu.edu

Wed Oct 09, 2013 11:38 am

VAR

8 Marks: 1 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 the current price of the bond?. Choose one answer. Choose one answer. a. $...

1

208

anbu.edu

Wed Oct 09, 2013 10:55 am

VAR

8 Marks: 1 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 the current price of the bond?. Choose one answer. Choose one answer. a. $...

1

223

anbu.edu

Wed Oct 09, 2013 10:55 am

VAR

8 Marks: 1 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 the current price of the bond?. Choose one answer. Choose one answer. a. $...

1

213

anbu.edu

Wed Oct 09, 2013 10:53 am

foundation

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...

0

210

anbu.edu

Wed Oct 09, 2013 2:40 am

foundation

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...

1

225

anbu.edu

Tue Oct 08, 2013 12:20 pm

foundation

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...

1

231

anbu.edu

Tue Oct 08, 2013 11:46 am

foundation

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...

1

286

anbu.edu

Tue Oct 08, 2013 11:43 am

foundation

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...

0

203

anbu.edu

Tue Oct 08, 2013 5:28 am

foundation

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...

1

212

anbu.edu

Tue Oct 08, 2013 5:25 am

foundation

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

2

225

anbu.edu

Tue Oct 08, 2013 2:25 am

FMP-swap

Choose one answer. a. St1: Enter into a swap transaction in which the firm pays fixed and receives floating. b. St2: Enter into a swap transaction in which the firm receives fixed and pays floating. c. St3: Purchase an interest ra...

1

199

anbu.edu

Tue Oct 08, 2013 2:21 am

FMP-swap

Choose one answer. a. $1.927 million b. $2.245 million c. $2.624 million d. $3.011 million Bank One enters into a 5-year swap contract with Mervin Co. to pay LIBOR in return for a fixed 8% rate on a nominal principal of $100 milli...

1

211

anbu.edu

Tue Oct 08, 2013 1:46 am

FMP-Options

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...

0

193

anbu.edu

Tue Oct 08, 2013 1:42 am

FMP-Options

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...

0

206

anbu.edu

Mon Oct 07, 2013 12:05 pm

FMP

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...

1

202

anbu.edu

Mon Oct 07, 2013 11:45 am

FMP

With all other things being equal, a risk monitoring system that assumes constant volatility for equity returns will understate the implied volatility for which of the following positions by the largest amount: Choose one answer. ...

1

218

anbu.edu

Mon Oct 07, 2013 6:59 am

FMP

A money market fund invests in Treasury bills. What is the principal risk that the fund manager must hedge for? a. Interest rate risk b. Default risk c. Funding liquidity risk d. Asset liquidity risk The answer is ...

4

227

anbu.edu

Mon Oct 07, 2013 6:28 am

FMP

A bronze producer will sell 1,000 mt (metric tons) of bronze in three months at the prevailing market price at that time. The standard deviation of the price of bronze over a three-month period is 2.6%. The company decides to use ...

1

200

anbu.edu

Mon Oct 07, 2013 2:13 am

FMP

What is reverse floater , does reverse floater exposed to an increase in interest rates?

1

179

anbu.edu

Sun Oct 06, 2013 11:29 pm

Quants

The current estimate of daily volatility is 1.5 percent. The closing price of an asset yesterday was $30.00. The closing price of the asset today is $30.50. Using the EWMA model with lembda = 0.94, the updated estimate of volatili...

1

219

anbu.edu

Sun Oct 06, 2013 11:14 pm

Quants

Which of the following statements regarding hypothesis testing is/are true? I.If the significance level is more than the p-value, the null hypothesis is rejected II.A decrease in the level of type I error causes a decrease in Type...

2

227

anbu.edu

Sun Oct 06, 2013 11:45 am

Quants

You are given the following information about the returns of stock P and stock Q: 1. Variance of return of stock P=100.0 2. Variance of return of stock Q=225.0 3. Covariance between the return of stock P and the return of stock Q=...

1

246

anbu.edu

Sun Oct 06, 2013 11:44 am

Quants

It has been observed that daily returns on spot positions of the euro against the U.S. dollar are highly correlated with returns on spot holdings of the Japanese yen against the dollar. This implies that Choose one answer. a. Wh...

1

225

anbu.edu

Sun Oct 06, 2013 8:02 am

Quants

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? Choose one...

1

225

anbu.edu

Sun Oct 06, 2013 7:51 am

Quants

or 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 Incorrect...

1

221

anbu.edu

Sun Oct 06, 2013 7:37 am

QUANTS

You work for a bank that lends to lots of different companies. Your boss asks you to quantify the impact of diversifying credit risk across industries. Which statement is true? Choose one answer. a. The dollar standard deviation...

1

216

swarnendupathak

Wed Oct 02, 2013 11:57 am

Test 2 for Market Risk Management (FRM Part-II)

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 &amp; hardly one question from Volatility smiles. So is there is any chance of getting such...

1

289

anbu.edu

Tue Oct 01, 2013 1:15 am

VAR

Hello every one ... I Dont know how to answer thew last two questiosns... Can any one help.. A stock price follows geometric Brownian motion with an expected return of 16% per annum and a volatility of 35% per annum. The current ...

2

241

rinky63a

Sun Sep 29, 2013 7:24 am

Calculation of VAR

(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...

1

229

rinky63a

Fri Sep 27, 2013 6:54 am

Capital Allocation - Marginal Economic Capital

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

2

383

rathod.rashmin

Tue Sep 24, 2013 9:53 am

Formulas for Variance and Covarince

Are the below formulas for Variance and Covariance true Ïxy=1/n*Æ©(X-µx)(Y-µy) =1/nÆ©XY â (µX*µY) Ï^2=1/n*Æ©(X-µ)^2=1/n*Æ©(X^2) - µ^2 Please advice on the last part of both formulas in perticular

1

247

anbu.edu

Tue Sep 17, 2013 1:28 am

Quants

Distributions like weibull,gamma,beta,logistic from quants are important for part 1 exam? If so were can i study that and what kinda questions will be asked

1

221

ashishsinha

Fri Sep 13, 2013 7:38 am

How to calculate the formula for Poisson Distribution in BA

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...

2

793

ashishsinha

Thu Sep 12, 2013 9:28 am

How to calculate the formula for Poisson Distribution in BA

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.

1

278

anbu.edu

Wed Sep 11, 2013 7:33 am

FRM -VAR

Can anyone please explain this formula P=c/(1+f(1))+c/(1+f(1))*(1+f(2))+c/(1+f(1))*...(1+f(t)) why we are discounting second coupon with two periods rates i.e with f1 and f2 source :FRM core reading 2013 VAR:book 4 pg 158

1

219

ashishsinha

Sun Sep 08, 2013 4:24 pm

Pls refund my money

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 ...

1

336

kapilanjan.npti

Sun Sep 08, 2013 7:50 am

VaR

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:...

1

233

anbu.edu

Sat Aug 31, 2013 1:46 pm

FRM- Realised Forward rates

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...

1

283

anbu.edu

Sat Aug 31, 2013 11:59 am

FRM-Spot rate

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

1

200

ashishsinha

Wed Aug 21, 2013 2:09 pm

Raising number to the power of fraction

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...

1

267

ashishsinha

Wed Aug 21, 2013 2:03 pm

Probability of non-default

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.

1

254

ashishsinha

Tue Aug 20, 2013 9:17 am

Calculation of Webinar

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...

1

229

anbu.edu

Fri Aug 16, 2013 9:18 am

FMP-Options

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&amp;06

1

233

llti20

Tue Aug 13, 2013 7:34 am

VaR

Hi In Puting VaR to Work, there is a somewhat strange convention of calling the % delta &quot;delta&quot; and the delta that I am more familiar with &quot;dollar delta&quot; or &quot;$ delta&quot;. Is this convention used on the ...

1

250

llti20

Tue Aug 13, 2013 7:28 am

expected loss & unexpected loss

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...

1

251

ashishsinha

Thu Aug 08, 2013 1:39 am

How to access the webinars which are over?

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 ...

1

221

ashishsinha

Thu Aug 08, 2013 1:12 am

Posting of first free webinar on FRM part 1 on the Edu Prist

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

1

354

anbu.edu

Mon Jul 29, 2013 1:10 pm

FRM -Quants Hypothesis

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...

2

288

kr.praharsh

Mon Jul 22, 2013 4:16 pm

Book Value vs Intrinsic Value

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.

1

251

its.ruchi2006

Tue Jul 16, 2013 5:44 pm

FRM Part 1-Practice paper

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...

3

349

its.ruchi2006

Tue Jul 16, 2013 5:40 pm

Quant-I

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...

1

264

ramki.mib

Fri Jul 12, 2013 12:07 am

What's CFA Planner?

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

1

268

ramki.mib

Fri Jul 12, 2013 12:06 am

How to start preparation for CFA Level 1 Dec 2013?

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

2

369

sadate1982

Tue Jul 09, 2013 3:34 am

Syllabus December 2013

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

2

263

User avatar

rahulthp

Wed Jul 03, 2013 9:01 am

First Mock Test Tentative Date

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.

1

391

ashishsinha

Mon Jul 01, 2013 5:53 pm

Blank PDF Files

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

1

327

ashishsinha

Mon Jul 01, 2013 5:49 pm

PDF FILES NOT OPENING

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

1

239

puneet

Fri Jun 28, 2013 10:04 am

Career Opportunity as Analyst Structuring in Chennai

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

0

361

puneet

Mon Jun 24, 2013 8:01 am

Career Opportunity as Analyst with Leading KPO in Pune

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

0

610

cometosujay

Mon Jun 17, 2013 4:15 am

Files are not playing

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

1

245

llti20

Thu Jun 13, 2013 8:40 am

new topics for FRM 1

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...

1

982

mainakbhowmik

Wed May 29, 2013 6:39 pm

Query regarding question on slide#28 of Quantitative Analysi

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

0

179

vishesh.2009

Fri May 24, 2013 6:42 pm

Total Pension expense

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...

0

251

darshit.sr

Fri May 17, 2013 5:58 pm

FMP 3rd recording not working

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...

0

275

andrea.allegra

Wed May 15, 2013 12:22 pm

Mock Exam Questions

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?

0

304

kamleshk

Mon May 13, 2013 9:06 pm

Answer key to the revision questions

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

0

265

shah.vishal

Sun May 12, 2013 10:00 pm

frm level test 1

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...

1

308

shah.vishal

Sun May 12, 2013 9:40 pm

frm level 1 test question

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

1

353

shah.vishal

Sun May 12, 2013 9:36 pm

frm level test question

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...

1

300

shah.vishal

Sun May 12, 2013 9:35 pm

frm level 1

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...

1

373

shah.vishal

Sun May 12, 2013 9:33 pm

frm level i urgent

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

1

416

vishesh.2009

Fri May 10, 2013 8:31 am

CFA L2 Recordings- Fixed Income Securities II

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...

0

314

peeyushbhatti

Sun May 05, 2013 1:28 am

Derivatives recorded lectures - CFA LEVEL II

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

0

399

vishesh.2009

Sat May 04, 2013 4:46 pm

CFA L2- FRA Recordings

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 ...

0

289

anbu.edu

Sat May 04, 2013 2:36 pm

FRM Level 1- Exam Querry

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

360

aswink

Fri May 03, 2013 12:10 pm

Basel ii documents on - Scenario Analysis for Operational Ri

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

0

355

vishnu.ftw

Fri May 03, 2013 8:08 am

CFA L1 Economics Quiz 2

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

493

nikunjnagar

Thu May 02, 2013 4:22 pm

FRM May 2013 Part 1 Exam

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

430

vishesh.2009

Wed May 01, 2013 4:35 pm

CFA L2- FRA Recordings

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

249

vishnu.ftw

Tue Apr 30, 2013 7:26 pm

CFA L1 Quants quiz 4

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

274

vishnu.ftw

Tue Apr 30, 2013 2:28 pm

Question about CFA L1 Ethics

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

585

paresh.patel

Sun Apr 28, 2013 5:11 pm

Recording

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

0

233

anbu.edu

Sat Apr 27, 2013 10:29 pm

FRM-VAR

Which of the following statements regarding the structured Monte Carlo approach is CORRECT? The general equation assumes the underlying asset has normally distributed returns with a mean of μ and a standard deviation of Ï. The ...

1

304

anbu.edu

Sat Apr 27, 2013 3:51 pm

FRM-Revision Calsses Querry

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

259

anbu.edu

Fri Apr 26, 2013 4:13 pm

FRM-FMP

Which of the following statements regarding duration is FALSE? A) Duration is a measure of percentage change in price for a given change in yield. B) Duration of a portfolio of bonds is equal to the market value weighted average ...

1

252

anbu.edu

Fri Apr 26, 2013 3:46 pm

FRM-FMP

or a 20-year, $1,000 par value, 6 percent coupon T-bond yielding 5 percent, the dollar value of a basis point (DV01) and associated percentage price change (PPC) are closest to: A) $0.14 and 0.01%. B) $0.57 and 0.06%. C) $2.45 an...

1

245

nikunjnagar

Thu Apr 25, 2013 7:42 pm

VaR Rivision Pack Answers

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

1

237

kamleshk

Thu Apr 25, 2013 7:57 am

Answer key to the revision questions

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

1

389

anbu.edu

Wed Apr 24, 2013 4:05 pm

FRM-FMP

Estimated price changes using only duration tend to: A) overestimate the increase in price that occurs with a decrease in yield for large changes in yield. B) underestimate the decrease in price that occurs with an increase in yie...

2

264

anbu.edu

Tue Apr 23, 2013 12:01 am

FRM-FMP

How will the value of a portfolio of non-callable corporate bonds hedged with Treasury futures change if the yield curve shifts up in a parallel manner by an anticipated amount? The value of the newly hedged portfolio: A) may inc...

1

297

anbu.edu

Mon Apr 22, 2013 3:49 pm

FRM-FMP

Which of the following statements regarding a futures trade of a deliverable contract is FALSE? A) The long is obligated to purchase the asset. B) Equilibrium futures price is known only at the end of the trading day. C) The shor...

2

319

sps.singh32

Mon Apr 22, 2013 1:39 pm

recordings

where i can find fra v recording as it shows only 4

0

271

vishnu.ftw

Sat Apr 20, 2013 11:18 am

CFA L1- Equity Quiz 2 questions

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

626

vishesh.2009

Fri Apr 19, 2013 6:16 pm

CFA L2 Videos- Portfolio Mgmt-1

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

292

anbu.edu

Thu Apr 18, 2013 11:50 pm

FRM-Regression analysis

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

248

anbu.edu

Thu Apr 18, 2013 11:21 pm

FRM-Regression analysis

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

256

kvastav

Thu Apr 18, 2013 9:30 pm

PRM 1 Preparation

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

236

vishnu.ftw

Thu Apr 18, 2013 6:10 pm

Equity Quiz 1

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

260

anbu.edu

Thu Apr 18, 2013 5:10 pm

FRM-Regression analysis

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

283

pradeeppdy

Thu Apr 18, 2013 11:43 am

corporate finance

Question-&quot;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

330

pradeeppdy

Tue Apr 16, 2013 10:00 am

derivatives

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

293

vishnu.ftw

Mon Apr 15, 2013 4:56 pm

CFA Level 1-FSA Test VI Questions

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

2

314

vishnu.ftw

Mon Apr 15, 2013 2:21 pm

CFA Level 1-FSA Test III Question 1

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

587

anbu.edu

Tue Apr 09, 2013 4:27 pm

FRM-Foundation

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

323

ameyakukde

Tue Apr 09, 2013 1:05 am

Futures Mkt PRM

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

452

ameyakukde

Tue Apr 09, 2013 12:58 am

Fx PRM

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

255

ameyakukde

Tue Apr 09, 2013 12:54 am

Fx PRM

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

252

ameyakukde

Tue Apr 09, 2013 12:50 am

Forex PRM

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

237

ameyakukde

Tue Apr 09, 2013 12:39 am

Money Mkts

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

332

ameyakukde

Sun Apr 07, 2013 12:37 am

GreeksDelta:

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

267

ameyakukde

Sun Apr 07, 2013 12:36 am

Binomial Model

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

232

ameyakukde

Sun Apr 07, 2013 12:35 am

BSM

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

236

ameyakukde

Sun Apr 07, 2013 12:34 am

Pricing

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

301

ameyakukde

Fri Apr 05, 2013 6:56 pm

PRM Axioms

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

0

266

anbu.edu

Thu Apr 04, 2013 11:50 pm

FRM-VAR

Which of the following describes the form of stress testing referred to as factor push analysis? A) The effect on the portfolio from simultaneous changes in several factors is examined. B) The risk factors that have the greatest ...

0

260

shah.vishal

Thu Apr 04, 2013 3:29 pm

FMP Part I recording

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

1

239

anbu.edu

Thu Apr 04, 2013 3:03 pm

FRM-VAR

A risk manager simulates the Worst Case Scenario (WCS) data in the following table using 10,000 random vectors for time horizons, H, of 50 and 100. Time Horizon = H H = 50 H = 100 Expected number of Z &lt; -2.33 1...

1

331

vishnu.ftw

Thu Apr 04, 2013 1:01 pm

Explain Quants-III Slide 16

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

251

anbu.edu

Thu Apr 04, 2013 12:40 am

FRM-VAR

An insurance company currently has a security portfolio with a market value of $243 million. The daily returns on the companyâs portfolio are normally distributed with a standard deviation of 1.4%. Using the table below, determi...

1

265

anbu.edu

Wed Apr 03, 2013 11:51 pm

FRM-VAR

Which value at risk methodology is most subject to model risk? A) Parametric. B) Variance/covariance. C) Monte Carlo simulation. D) Historical. View Answer Monte Carlo simulation is subject to model risk. Source: schweser My dou...

1

254

anbu.edu

Wed Apr 03, 2013 11:42 pm

FRM-VAR

Annual volatility: Ï = 20.0% Annual risk-free rate = 6.0% Exercise price (X) = 24 Time to maturity = 3 months Stock price, S $21.00 $22.00 $23.00 $24.00 $24.75 $25.00 Value of call, C $0.13 $0.32 $0.64 $1.14 $1.62...

1

272

anbu.edu

Wed Apr 03, 2013 11:24 pm

FRM-VAR

fat-tail distributions is most likely results from time-varying volatility for the unconditional distribution- I don't understand this concept, can you please explain this line

1

282

vishnu.ftw

Wed Apr 03, 2013 5:05 pm

General question regarding exam prep

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

268

vishnu.ftw

Wed Apr 03, 2013 5:03 pm

Quants-II, Slide 61, Which normal distribution has higher de

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

0

134

anbu.edu

Mon Apr 01, 2013 11:07 pm

FRM-FMP

Which of the following is TRUE in normal backwardation? Futures prices tend to: A) fall over the life of the contract because hedgers are net short and have to receive compensation for bearing risk. B) rise over the life of the c...

1

325

jumpit

Mon Apr 01, 2013 4:31 am

T-Test and Confidence interval from online quiz

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

376

akashbachhawat

Fri Mar 29, 2013 11:45 am

Quants 3 ( Hypothetical testing)

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

330

anbu.edu

Fri Mar 29, 2013 1:10 am

FRM-FMP

In analyzing the differences between the spot price of wheat and the price of a wheat futures contracts at a given time, what causes changes in the basis? A) Changes in cost of carry of the asset. B) Price volatility. C) Basis ri...

2

298

anbu.edu

Thu Mar 28, 2013 2:00 am

FRM-FMP

Jon Crandell, FRM is a fixed income portfolio manager, and he wishes to create a T-bond futures hedge to alter his portfolioâs duration. What should he do if he wishes to shorten the duration of his portfolio with minimal disrup...

1

246

anbu.edu

Thu Mar 28, 2013 1:48 am

FRM-FMP

Austin Traynor is considering buying a $1,000 face value, semi-annual coupon bond with a quoted price of 104.75 and accrued interest since the last coupon of $33.50. If Traynor pays the dirty price, how much will the seller receiv...

1

290

anbu.edu

Thu Mar 28, 2013 1:34 am

FRM-FMP

Which of the following statements regarding accrued interest is most accurate? A) The bond is trading flat if the bond issuer is in default and the bond is trading without accrued interest. B) The accrued interest is paid by the ...

1

243

anbu.edu

Wed Mar 27, 2013 12:58 am

FRM-FMP

If 1-year rates are 5 percent, 1-year rates one year from now are expected to be 5.75 percent, and 1-year rates two years from now are expected to be 6.25 percent, then the unbiased expectations theory of interest rates would indi...

1

248

anbu.edu

Tue Mar 26, 2013 5:51 pm

FRM-FMP

Which of the following is TRUE concerning basis risk? In a hedge using futures contracts: A) basis risk of the hedged security is replaced with price risk. B) price risk of the hedged security is replaced with basis risk. C) basi...

1

276

anbu.edu

Mon Mar 25, 2013 12:48 am

FRM-regression Analysis

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

293

anbu.edu

Mon Mar 25, 2013 12:39 am

FRM-regression Analysis

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

212

anbu.edu

Sun Mar 24, 2013 2:36 pm

FRM-Regression

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

249

anbu.edu

Sun Mar 24, 2013 2:01 pm

FRM-regression Analysis

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

244

anbu.edu

Sun Mar 24, 2013 1:59 pm

FRM-regression Analysis

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

236

deepakkrkanodia

Sat Mar 23, 2013 8:38 pm

PLEASE ANSWER MY FRA QUESTIONS POSTED ON 25 FEB PREVIOUSLY

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

0

513

anbu.edu

Fri Mar 22, 2013 1:16 am

FRM-Regression analysis

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

215

shah.vishal

Thu Mar 21, 2013 10:48 pm

Discrete compounding rate

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

240

anbu.edu

Thu Mar 21, 2013 10:22 pm

FRM-Quants

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

237

anbu.edu

Thu Mar 21, 2013 2:01 am

FRM-Quants

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

250

shah.vishal

Wed Mar 20, 2013 4:36 pm

TVM Calculation Recordings on BA plus II

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

248

anbu.edu

Wed Mar 20, 2013 3:55 pm

FRM-Quants

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

1

227

anbu.edu

Wed Mar 20, 2013 1:39 am

FRM-Quants

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) ⢠Ï(Y). C) there is no upper bound unless the variables are independent. D) zero. Can you please explain ...

1

233

anbu.edu

Wed Mar 20, 2013 1:32 am

FRM-Quants

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

229

anbu.edu

Wed Mar 20, 2013 1:27 am

FRM-Quants

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

219

anbu.edu

Tue Mar 19, 2013 4:20 pm

FRM-Quants

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

210

anbu.edu

Tue Mar 19, 2013 3:38 pm

FRM-Quants

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

217

anbu.edu

Tue Mar 19, 2013 1:00 am

QUANTS

Consider the following linear regression model: Y = a + b*X + e. Suppose a = 0.05, b = 1.2, Std(Y) = 0.26, Std(e) = 0.1, what is the correlation between X and Y? Choose one answer. a. 0.852 b. 0.701 c. 0.923 d. 0....

0

224

ameyakukde

Mon Mar 18, 2013 11:20 pm

BPV

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

610

priya.accmail

Sun Mar 17, 2013 9:02 pm

Block Brokers?

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

CFA

1

423

shah.vishal

Sat Mar 16, 2013 7:49 pm

Future Price Valuation

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

665

ameyakukde

Sat Mar 16, 2013 6:05 am

BSM

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

269

ameyakukde

Sat Mar 16, 2013 5:59 am

Options Quiz 2 Q3 PRM

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

201

ameyakukde

Sat Mar 16, 2013 5:54 am

Options Quiz 2 Q 5 PRM

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

435

ameyakukde

Sat Mar 16, 2013 2:29 am

Greeks: Delta Question Pristine Options Quiz 1 Q.18 PRM pape

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

414

anbu.edu

Sat Mar 16, 2013 1:14 am

FRM-Regression analysis

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

200

shah.vishal

Fri Mar 15, 2013 3:27 pm

Stack and Roll Concept

Please Explain &quot;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

241

anbu.edu

Thu Mar 14, 2013 4:13 pm

FRM-Hypothesis testing

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

216

anbu.edu

Thu Mar 14, 2013 3:15 pm

FRM-hypothesis testing

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

303

anbu.edu

Thu Mar 14, 2013 2:41 pm

hypothesis testing

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

672

anbu.edu

Thu Mar 14, 2013 12:52 am

FRM-Quants

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

269

clever.tina

Tue Mar 12, 2013 9:48 pm

Cfa-Portfolio

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

218

anbu.edu

Tue Mar 12, 2013 5:24 pm

FRM-FMP can you please ans this qustion

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

241

anbu.edu

Tue Mar 12, 2013 4:14 pm

FMP-Valuations of Forwardss

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

1

241

ameyakukde

Sat Mar 09, 2013 11:44 am

Greeks: Delta

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

365

pradeeppdy

Thu Mar 07, 2013 4:54 pm

equity investment

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

1

218

pankaj

Thu Mar 07, 2013 9:31 am

lease tell me detailscomapany comparables and transaction co

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

235

anbu.edu

Wed Mar 06, 2013 11:13 pm

frm-Can you please ans this question

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

246

anbu.edu

Wed Mar 06, 2013 11:12 pm

FRM-Can you please ans this question

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

225

anbu.edu

Wed Mar 06, 2013 11:07 pm

FRM-Can you please ans this question

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

236

deepakkrkanodia

Mon Feb 25, 2013 8:43 pm

FRA- CFA L1 queries

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

267

paresh.patel

Fri Feb 22, 2013 10:22 pm

Books

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 ...

FRM

1

317

teja.s.srungaram

Thu Feb 21, 2013 11:17 pm

unable to download FRM recordings

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

324

paresh.patel

Wed Feb 20, 2013 11:53 am

Materials

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

241

mohit.gautam1983

Tue Feb 19, 2013 10:41 am

Batch started from 3rd of Feb.2013

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

349

parthasd.bt

Fri Feb 15, 2013 11:43 am

CFA Level 1 Preparation

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

0

380

piyul07

Wed Feb 13, 2013 3:58 pm

Probablity

How can i will get No.of questions on probablity.

1

227

sairamu217

Wed Feb 13, 2013 3:26 pm

FSAIII

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

405

sps.singh32

Wed Feb 13, 2013 10:31 am

ethics

it will b fine if i do ethics from schweser

cfa

1

542

avishek.srivastava8

Tue Feb 12, 2013 3:12 pm

FRM Quiz

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...

FRM

0

281

deepakkrkanodia

Fri Feb 08, 2013 10:22 am

FSA L1- long term liabilities

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

16155

deepakkrkanodia

Wed Feb 06, 2013 7:35 pm

ETHICS Queries

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...

cfa