ARAROC formula

rshankar0508
Posts: 6
Joined: Sat Apr 16, 2016 11:43 am

ARAROC formula

Postby rshankar0508 » Mon May 16, 2016 3:31 pm

Please provide the formula for ARAROC in GARP Q Set (Q No. 30) has different formula then Schweser Notes and Edupristine notes have no mention of it.

edupristine
Finance Junkie
Posts: 722
Joined: Wed Apr 09, 2014 6:28 am

Re: ARAROC formula

Postby edupristine » Tue May 17, 2016 8:20 am

Hi Rshankar

RAROC = Risk Adjusted Return / Economic Capital

economical capital is the capital reserve, which protect against insolvency.
and
ARAROC = (RAROC – Risk Free Rate)/Equity Beta

rshankar0508
Posts: 6
Joined: Sat Apr 16, 2016 11:43 am

Re: ARAROC formula

Postby rshankar0508 » Tue May 17, 2016 11:45 am

My question pertains to Adjusted RAROC not RAROC.

rshankar0508
Posts: 6
Joined: Sat Apr 16, 2016 11:43 am

Re: ARAROC formula

Postby rshankar0508 » Wed May 18, 2016 12:51 pm

Awaiting for reply, i hope the Edupristine people understand the urgency.

edupristine
Finance Junkie
Posts: 722
Joined: Wed Apr 09, 2014 6:28 am

Re: ARAROC formula

Postby edupristine » Thu May 19, 2016 7:45 am

Hi R Shankar

ARAROC = (RAROC – Risk Free Rate)/Equity Beta


Return to “FRM Part II”



Disclaimer

Global Association of Risk Professionals, Inc. (GARP®) does not endorse, promote, review or warrant the accuracy of the products or services offered by EduPristine for FRM® related information, nor does it endorse any pass rates claimed by the provider. Further, GARP® is not responsible for any fees or costs paid by the user to EduPristine nor is GARP® responsible for any fees or costs of any person or entity providing any services to EduPristine Study Program. FRM®, GARP® and Global Association of Risk Professionals®, are trademarks owned by the Global Association of Risk Professionals, Inc

CFA Institute does not endorse, promote, or warrant the accuracy or quality of the products or services offered by EduPristine. CFA Institute, CFA®, Claritas® and Chartered Financial Analyst® are trademarks owned by CFA Institute.

Utmost care has been taken to ensure that there is no copyright violation or infringement in any of our content. Still, in case you feel that there is any copyright violation of any kind please send a mail to abuse@edupristine.com and we will rectify it.