Blog

Featured Article

Utilizing the Bionic Turtle FRM Forum

The Bionic Turtle FRM Forum The Bionic Turtle FRM forum was created to provide our website visitors with a place where they can quickly find information about the FRM concepts without having to search through pages of study materials or different websites. The forum has been a tremendous asset to FRM exam candidates for many years. It... Read More

Recent Posts

Week in Financial Education (June 21, 2021)

Welcome to the latest WIFE. For Part 1, we have a new practice question (PQ) set for the insurance chapter (FMP-2). I have a question about the combined ratio after dividends (CRAD). This CRAD measure is interesting because some sources subtract the dividend, CRAD = CR - D, while others (like GARP) add per CRAD... Read More

A technical note on inferring cumulative default probability from credit spreads

I wanted to write a note about a mistake in one of GARP's Pre-Study Practice Exams. Unfortunately, although we've given plenty of feedback over the years, technical mistakes persist. Especially in regard to hazard rate properties (especially when applied to counterparty CVA), our members continue to spot solutions that are misleading. Ironically, some misunderstandings are... Read More

Week in Financial Education (June 14, 2021)

Welcome to another WIFE. Last week we added a new practice question (PQ) set for the Insurance chapter (P1.FMP-2) and a new PQ set for the Risk Monitoring chapter (P2.IM-7). Trying to be realistic, for the mortality table, I pulled actual projected 2021 period life tables from the Social Security Administration at https://www.ssa.gov/. We received... Read More

David Compares Durations in CFA vs. FRM

I'd like to clarify duration terminology as it pertains to differences between the CFA and FRM. Our forum has hundreds of threads over 12+ years on duration concepts (it's hard to say which links are the best at this point, but I'll maybe come back and curate some best links). Our YouTube channel has an... Read More

Week in Financial Education (June 7, 2021)

Welcome to another WIFE. We started a new series of practice questions (PQ) for Financial Markets and Products (P1.T3). Question 21.2.1 (Investment banks) reflects my style of packing three concepts (any one of which might be tested) into one question by using the Dutch auction's answer to inform a comparison to the other approaches (best... Read More

Capital Market Line (CML) vs. Security Market Line (SML)

We received a question on YouTube that is helpful in understanding the relationship (and difference) between the Capital Market Line (CML) and the Security Market Line (SML). Related, earlier in the year Akriti1 posted another provider's (EPP's) flawed CML/SML practice question that's typical of a naïve understanding of the CML/CAPM framework: the author presumes the only difference is... Read More

Week in Financial Education (May 24, 2021)

In our latest Week in Financial Education (WIFE), Richie's new video helpfully reviews a series of duration questions, including modified, Macaulay, money duration, and price value of basis point (PVBP; aka, PV01). Compared to the FRM, the CFA's approach to duration differs only slightly. The formulas are essentially similar. The CFA's modified duration is analytical (e.g.,... Read More

Week in Financial Education (May 17, 2021)

Welcome to another Week in Financial Education! This week saw some great questions and fascinating insights. I will just highlight the instructive example of a flawed solution in the 2021 practice paper (as usual, the impetus is candidates' justifiable confusion). This one is tricky because the correct answer is coincident with two implicit assumptions, but... Read More

Week in Financial Education (May 10, 2021)

Welcome to the latest week in financial education (WIFE)! As the May exams have started, we experienced another busy week. We are grateful for some fabulous contributions by members (see links below). At this time of year, many candidates are naturally focused on practice question revision, not just from our database but also from other... Read More

Week in Financial Education (May 3, 2021)

Hello, welcome to another WIFE! Our FRM forum was super busy last week. I wrote a long reply to the question (link below) about the interpretation of foreign exchange (FX) quotes. We have experience here. This is one of many examples of where we (members in this forum) prompted a correction to GARP's imprecise syntax... Read More

Week in Financial Education (April 19, 2021)

I hope you enjoy my latest time series question set (P1.T2.21.2). It was fun to develop these with actual code snippets. GARP's text (Chapter 11) on the Augmented Dickey-Fuller (ADF) might seem dense to readers, but you'll see that in R we can execute the test with a single function call, adf.test(). As a practical... Read More

Week in Financial Education (April 12, 2021)

I hope you enjoy my latest non-stationary time series (TS) question set (T2.21.1. below). As with the previous TS Q&A, I provided code snippets to add to the realism. For example, you can see how easy it is to determine the (unit root) polynomial roots. In that regard, I considered including a question that requires... Read More