Today's Daily Questions

David writes totally fresh, totally original practice (quiz) questions every week: a fresh set of three (4) from Mon to Thursday = 12 new practice questions per week. A few hungry customers like to follow along, so we post them here.

Paid members please note: you do not need to collect practice questions one at a time! After a chapter (or section of related chapters) is finished, Nicole collects them into a single PDF file and uploads to the Study Planner. Most paid members will want to go straight to the study planner (unless you want to discuss/etc in the forum). Thank you!

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  1. Nicole Seaman

    P2.T7.701. Operational risk governance

    @Hermz29 Thank you for appreciating this question set! These operational risk review questions are tough (time-consuming) to write by the time I polish, cross-check and calibrate them, but there's always some fresh insights to mine from the material it seems :)
    @Hermz29 Thank you for appreciating this question set! These operational risk review questions are tough (time-consuming) to write by the time I polish, cross-check and calibrate them, but there's always some fresh insights to mine from the material it seems :)
    @Hermz29 Thank you for appreciating this question set! These operational risk review questions are tough (time-consuming) to write by the time I polish, cross-check and calibrate them, but there's always some fresh insights to mine from the material it seems :)
    @Hermz29 Thank you for appreciating this question set! These operational risk review questions are tough (time-consuming) to write by the time I polish, cross-check and calibrate them, but there's...
    Replies:
    6
    Views:
    181
  2. David Harper CFA FRM

    L1.T4.14. Yield to maturity (YTM)

    Thanks Nicole!
    Thanks Nicole!
    Thanks Nicole!
    Thanks Nicole!
    Replies:
    7
    Views:
    1,929
  3. Nicole Seaman

    P1.T3.510. Dollar roll (Tuckman)

    Hi @Bucephalus Those are good points! I do appreciate that the timing of principal re- and pre-payment matters in these models, but to be honest, I do not know the dollar roll rules. Instead, I can only infer from Tuckman's own modelling assumptions (which I believe I followed). Here is the XLS (and corresponding snapshot below) in which I replicated Tuckman's own dollar roll example: ... To...
    Hi @Bucephalus Those are good points! I do appreciate that the timing of principal re- and pre-payment matters in these models, but to be honest, I do not know the dollar roll rules. Instead, I can only infer from Tuckman's own modelling assumptions (which I believe I followed). Here is the XLS (and corresponding snapshot below) in which I replicated Tuckman's own dollar roll example: ... To...
    Hi @Bucephalus Those are good points! I do appreciate that the timing of principal re- and pre-payment matters in these models, but to be honest, I do not know the dollar roll rules. Instead, I can only infer from Tuckman's own modelling assumptions (which I believe I followed). Here is the XLS...
    Hi @Bucephalus Those are good points! I do appreciate that the timing of principal re- and pre-payment matters in these models, but to be honest, I do not know the dollar roll rules. Instead, I...
    Replies:
    9
    Views:
    1,660
  4. Nicole Seaman

    P1.T3.722. Using the swap rate to bootstrap the forward rate and basic interest rate swap valuation

    Learning objectives: Explain the mechanics of a plain vanilla interest rate swap and compute its cash flows ... Calculate the value of a plain vanilla interest rate swap based on two simultaneous bond positions. Calculate the value of a plain vanilla interest rate swap from a sequence of forward rate agreements (FRAs). Questions: 722.1. Consider two firms, Reliable Corp and Dubious Corp....
    Learning objectives: Explain the mechanics of a plain vanilla interest rate swap and compute its cash flows ... Calculate the value of a plain vanilla interest rate swap based on two simultaneous bond positions. Calculate the value of a plain vanilla interest rate swap from a sequence of forward rate agreements (FRAs). Questions: 722.1. Consider two firms, Reliable Corp and Dubious Corp....
    Learning objectives: Explain the mechanics of a plain vanilla interest rate swap and compute its cash flows ... Calculate the value of a plain vanilla interest rate swap based on two simultaneous bond positions. Calculate the value of a plain vanilla interest rate swap from a sequence of forward...
    Learning objectives: Explain the mechanics of a plain vanilla interest rate swap and compute its cash flows ... Calculate the value of a plain vanilla interest rate swap based on two simultaneous...
    Replies:
    0
    Views:
    107
  5. Nicole Seaman

    P2.T7.700. Operational risk definition

    @Hermz29 The answers and explanations for our daily practice questions are only available to our paid customers, as they are part of our practice question sets in the study planner. David spends hours writing in-depth practice questions, so it is not something that we can offer to our free members. You can view all of our study packages here: :) Nicole
    @Hermz29 The answers and explanations for our daily practice questions are only available to our paid customers, as they are part of our practice question sets in the study planner. David spends hours writing in-depth practice questions, so it is not something that we can offer to our free members. You can view all of our study packages here: :) Nicole
    @Hermz29 The answers and explanations for our daily practice questions are only available to our paid customers, as they are part of our practice question sets in the study planner. David spends hours writing in-depth practice questions, so it is not something that we can offer to our free...
    @Hermz29 The answers and explanations for our daily practice questions are only available to our paid customers, as they are part of our practice question sets in the study planner. David spends...
    Replies:
    3
    Views:
    177
  6. Nicole Seaman

    P1.T3.718. Cost of carry with cash flow and normal backwardation (Hull Chapter 5)

    Hello @diemhuongpham The answers to our daily practice questions are only available to our paid customers who have purchased one of our study packages. These questions are part of our paid practice question sets, so we cannot provide the answers for free. Full forum access, which includes in-depth answers and explanations, is included with the price of our study packages. You can view all of...
    Hello @diemhuongpham The answers to our daily practice questions are only available to our paid customers who have purchased one of our study packages. These questions are part of our paid practice question sets, so we cannot provide the answers for free. Full forum access, which includes in-depth answers and explanations, is included with the price of our study packages. You can view all of...
    Hello @diemhuongpham The answers to our daily practice questions are only available to our paid customers who have purchased one of our study packages. These questions are part of our paid practice question sets, so we cannot provide the answers for free. Full forum access, which includes...
    Hello @diemhuongpham The answers to our daily practice questions are only available to our paid customers who have purchased one of our study packages. These questions are part of our paid...
    Replies:
    2
    Views:
    218
  7. Nicole Seaman

    P1.T3.721. Eurodollar futures contracts and duration-based hedging (Hull)

    Learning objectives: Calculate the final contract price on a Eurodollar futures contract. Describe and compute the Eurodollar futures contract convexity adjustment. Explain how Eurodollar futures can be used to extend the LIBOR zero curve. Calculate the duration-based hedge ratio and create a duration-based hedging strategy using interest rate futures. Explain the limitations of using a...
    Learning objectives: Calculate the final contract price on a Eurodollar futures contract. Describe and compute the Eurodollar futures contract convexity adjustment. Explain how Eurodollar futures can be used to extend the LIBOR zero curve. Calculate the duration-based hedge ratio and create a duration-based hedging strategy using interest rate futures. Explain the limitations of using a...
    Learning objectives: Calculate the final contract price on a Eurodollar futures contract. Describe and compute the Eurodollar futures contract convexity adjustment. Explain how Eurodollar futures can be used to extend the LIBOR zero curve. Calculate the duration-based hedge ratio and create a...
    Learning objectives: Calculate the final contract price on a Eurodollar futures contract. Describe and compute the Eurodollar futures contract convexity adjustment. Explain how Eurodollar futures...
    Replies:
    0
    Views:
    120
  8. Nicole Seaman

    P2.T6.715. Credit derivatives and securitization

    Concept: These on-line quiz questions are not specifically linked to learning objectives, but are instead based on recent sample questions. The difficulty level is a notch, or two notches, easier than bionicturtle.com's typical question such that the intended difficulty level is nearer to an actual exam question. As these represent "easier than our usual" practice questions, they are...
    Concept: These on-line quiz questions are not specifically linked to learning objectives, but are instead based on recent sample questions. The difficulty level is a notch, or two notches, easier than bionicturtle.com's typical question such that the intended difficulty level is nearer to an actual exam question. As these represent "easier than our usual" practice questions, they are...
    Concept: These on-line quiz questions are not specifically linked to learning objectives, but are instead based on recent sample questions. The difficulty level is a notch, or two notches, easier than bionicturtle.com's typical question such that the intended difficulty level is nearer to an...
    Concept: These on-line quiz questions are not specifically linked to learning objectives, but are instead based on recent sample questions. The difficulty level is a notch, or two notches, easier...
    Replies:
    0
    Views:
    159
  9. Nicole Seaman

    P1.T3.720. US Treasury bonds: conversion factors, cheapest-to-deliver & theoretical futures price

    As noted, Question 720.3 applies the Learning Objective listed above: "Calculate the theoretical futures price for a Treasury bond futures contract." This is a tedious calculation :eek: In our revised learning XLS, I've tried to compact this into a user-friendly exhibit. Below shows the answer to Hull's EOC Problem 6.11. A key aspect is the timeline. Also, I explicate the cost of carry model...
    As noted, Question 720.3 applies the Learning Objective listed above: "Calculate the theoretical futures price for a Treasury bond futures contract." This is a tedious calculation :eek: In our revised learning XLS, I've tried to compact this into a user-friendly exhibit. Below shows the answer to Hull's EOC Problem 6.11. A key aspect is the timeline. Also, I explicate the cost of carry model...
    As noted, Question 720.3 applies the Learning Objective listed above: "Calculate the theoretical futures price for a Treasury bond futures contract." This is a tedious calculation :eek: In our revised learning XLS, I've tried to compact this into a user-friendly exhibit. Below shows the answer to...
    As noted, Question 720.3 applies the Learning Objective listed above: "Calculate the theoretical futures price for a Treasury bond futures contract." This is a tedious calculation :eek: In our revised...
    Replies:
    1
    Views:
    164
  10. Nicole Seaman

    P2.T6.714. Wrong-way risk, counterparty credit risk (CCR) stress testing, and credit support annex

    Concept: These on-line quiz questions are not specifically linked to learning objectives, but are instead based on recent sample questions. The difficulty level is a notch, or two notches, easier than bionicturtle.com's typical question such that the intended difficulty level is nearer to an actual exam question. As these represent "easier than our usual" practice questions, they are...
    Concept: These on-line quiz questions are not specifically linked to learning objectives, but are instead based on recent sample questions. The difficulty level is a notch, or two notches, easier than bionicturtle.com's typical question such that the intended difficulty level is nearer to an actual exam question. As these represent "easier than our usual" practice questions, they are...
    Concept: These on-line quiz questions are not specifically linked to learning objectives, but are instead based on recent sample questions. The difficulty level is a notch, or two notches, easier than bionicturtle.com's typical question such that the intended difficulty level is nearer to an...
    Concept: These on-line quiz questions are not specifically linked to learning objectives, but are instead based on recent sample questions. The difficulty level is a notch, or two notches, easier...
    Replies:
    0
    Views:
    206
  11. Nicole Seaman

    P1.T3.719. Quoted versus cash bond prices (Hull Chapter 6)

    Learning objectives: Identify the most commonly used day count conventions, describe the markets that each one is typically used in, and apply each to an interest calculation. Calculate the conversion of a discount rate to a price for a US Treasury bill. Differentiate between the clean and dirty price for a US Treasury bond; calculate the accrued interest and dirty price on a US Treasury...
    Learning objectives: Identify the most commonly used day count conventions, describe the markets that each one is typically used in, and apply each to an interest calculation. Calculate the conversion of a discount rate to a price for a US Treasury bill. Differentiate between the clean and dirty price for a US Treasury bond; calculate the accrued interest and dirty price on a US Treasury...
    Learning objectives: Identify the most commonly used day count conventions, describe the markets that each one is typically used in, and apply each to an interest calculation. Calculate the conversion of a discount rate to a price for a US Treasury bill. Differentiate between the clean and dirty...
    Learning objectives: Identify the most commonly used day count conventions, describe the markets that each one is typically used in, and apply each to an interest calculation. Calculate the...
    Replies:
    0
    Views:
    181
  12. Nicole Seaman

    P2.T6.713. Exposure profiles and credit value adjustment (CCR CVA)

    Concept: These on-line quiz questions are not specifically linked to learning objectives, but are instead based on recent sample questions. The difficulty level is a notch, or two notches, easier than bionicturtle.com's typical question such that the intended difficulty level is nearer to an actual exam question. As these represent "easier than our usual" practice questions, they are...
    Concept: These on-line quiz questions are not specifically linked to learning objectives, but are instead based on recent sample questions. The difficulty level is a notch, or two notches, easier than bionicturtle.com's typical question such that the intended difficulty level is nearer to an actual exam question. As these represent "easier than our usual" practice questions, they are...
    Concept: These on-line quiz questions are not specifically linked to learning objectives, but are instead based on recent sample questions. The difficulty level is a notch, or two notches, easier than bionicturtle.com's typical question such that the intended difficulty level is nearer to an...
    Concept: These on-line quiz questions are not specifically linked to learning objectives, but are instead based on recent sample questions. The difficulty level is a notch, or two notches, easier...
    Replies:
    0
    Views:
    158
  13. Nicole Seaman

    P2.T6.712. Counterparty credit exposure essentials: calculation, netting & potential future exposure

    Concept: These on-line quiz questions are not specifically linked to learning objectives, but are instead based on recent sample questions. The difficulty level is a notch, or two notches, easier than bionicturtle.com's typical question such that the intended difficulty level is nearer to an actual exam question. As these represent "easier than our usual" practice questions, they are...
    Concept: These on-line quiz questions are not specifically linked to learning objectives, but are instead based on recent sample questions. The difficulty level is a notch, or two notches, easier than bionicturtle.com's typical question such that the intended difficulty level is nearer to an actual exam question. As these represent "easier than our usual" practice questions, they are...
    Concept: These on-line quiz questions are not specifically linked to learning objectives, but are instead based on recent sample questions. The difficulty level is a notch, or two notches, easier than bionicturtle.com's typical question such that the intended difficulty level is nearer to an...
    Concept: These on-line quiz questions are not specifically linked to learning objectives, but are instead based on recent sample questions. The difficulty level is a notch, or two notches, easier...
    Replies:
    0
    Views:
    144
  14. Nicole Seaman

    P1.T3.717. Foreign exchange (FX) forwards and more cost of carry theory (Hull Chapter 5)

    Learning objectives: Calculate a forward foreign exchange rate using the interest rate parity relationship. Define income, storage costs, and convenience yield. Calculate the futures price on commodities incorporating income/storage costs and/or convenience yields. Questions: 717.1. Near the end of July, the settlement price for the August Mexican Peso Futures contract is MXN/USD $0.050...
    Learning objectives: Calculate a forward foreign exchange rate using the interest rate parity relationship. Define income, storage costs, and convenience yield. Calculate the futures price on commodities incorporating income/storage costs and/or convenience yields. Questions: 717.1. Near the end of July, the settlement price for the August Mexican Peso Futures contract is MXN/USD $0.050...
    Learning objectives: Calculate a forward foreign exchange rate using the interest rate parity relationship. Define income, storage costs, and convenience yield. Calculate the futures price on commodities incorporating income/storage costs and/or convenience yields. Questions: 717.1. Near the...
    Learning objectives: Calculate a forward foreign exchange rate using the interest rate parity relationship. Define income, storage costs, and convenience yield. Calculate the futures price on...
    Replies:
    0
    Views:
    141
  15. Nicole Seaman

    P2.T6.711. Credit portfolios and structured credit risk

    Concept: These on-line quiz questions are not specifically linked to learning objectives, but are instead based on recent sample questions. The difficulty level is a notch, or two notches, easier than bionicturtle.com's typical question such that the intended difficulty level is nearer to an actual exam question. As these represent "easier than our usual" practice questions, they are...
    Concept: These on-line quiz questions are not specifically linked to learning objectives, but are instead based on recent sample questions. The difficulty level is a notch, or two notches, easier than bionicturtle.com's typical question such that the intended difficulty level is nearer to an actual exam question. As these represent "easier than our usual" practice questions, they are...
    Concept: These on-line quiz questions are not specifically linked to learning objectives, but are instead based on recent sample questions. The difficulty level is a notch, or two notches, easier than bionicturtle.com's typical question such that the intended difficulty level is nearer to an...
    Concept: These on-line quiz questions are not specifically linked to learning objectives, but are instead based on recent sample questions. The difficulty level is a notch, or two notches, easier...
    Replies:
    0
    Views:
    177
  16. Nicole Seaman

    P1.T3.716. Arbitrage and the cost of carry model (Hull Chapter 5)

    Learning objectives: Differentiate between investment and consumption assets. Define short-selling and calculate the net profit of a short sale of a dividend-paying stock. Describe the differences between forward and futures contracts and explain the relationship between forward and spot prices. Calculate the forward price given the underlying asset’s spot price, and describe an arbitrage...
    Learning objectives: Differentiate between investment and consumption assets. Define short-selling and calculate the net profit of a short sale of a dividend-paying stock. Describe the differences between forward and futures contracts and explain the relationship between forward and spot prices. Calculate the forward price given the underlying asset’s spot price, and describe an arbitrage...
    Learning objectives: Differentiate between investment and consumption assets. Define short-selling and calculate the net profit of a short sale of a dividend-paying stock. Describe the differences between forward and futures contracts and explain the relationship between forward and spot prices....
    Learning objectives: Differentiate between investment and consumption assets. Define short-selling and calculate the net profit of a short sale of a dividend-paying stock. Describe the differences...
    Replies:
    0
    Views:
    183
  17. Nicole Seaman

    P2.T6.710. Merton, survival time, and z-spread

    Concept: These on-line quiz questions are not specifically linked to learning objectives, but are instead based on recent sample questions. The difficulty level is a notch, or two notches, easier than bionicturtle.com's typical question such that the intended difficulty level is nearer to an actual exam question. As these represent "easier than our usual" practice questions, they are...
    Concept: These on-line quiz questions are not specifically linked to learning objectives, but are instead based on recent sample questions. The difficulty level is a notch, or two notches, easier than bionicturtle.com's typical question such that the intended difficulty level is nearer to an actual exam question. As these represent "easier than our usual" practice questions, they are...
    Concept: These on-line quiz questions are not specifically linked to learning objectives, but are instead based on recent sample questions. The difficulty level is a notch, or two notches, easier than bionicturtle.com's typical question such that the intended difficulty level is nearer to an...
    Concept: These on-line quiz questions are not specifically linked to learning objectives, but are instead based on recent sample questions. The difficulty level is a notch, or two notches, easier...
    Replies:
    0
    Views:
    151
  18. Nicole Seaman

    P1.T3.715. Par yield, convexity and term structure theories (Hull Chapter 4)

    Learning objectives: Calculate the change in a bond’s price given its duration, its convexity, and a change in interest rates. Compare and contrast the major theories of the term structure of interest rates Questions: 715.1. Consider the following continuously compounded zero (spot) rate curve and their associated discount factors; e.g., df(1.5) = exp(-0.0540*1.5) = 0.9222. What is...
    Learning objectives: Calculate the change in a bond’s price given its duration, its convexity, and a change in interest rates. Compare and contrast the major theories of the term structure of interest rates Questions: 715.1. Consider the following continuously compounded zero (spot) rate curve and their associated discount factors; e.g., df(1.5) = exp(-0.0540*1.5) = 0.9222. What is...
    Learning objectives: Calculate the change in a bond’s price given its duration, its convexity, and a change in interest rates. Compare and contrast the major theories of the term structure of interest rates Questions: 715.1. Consider the following continuously compounded zero (spot) rate curve...
    Learning objectives: Calculate the change in a bond’s price given its duration, its convexity, and a change in interest rates. Compare and contrast the major theories of the term structure of...
    Replies:
    0
    Views:
    170
  19. Nicole Seaman

    P2.T6.709. Credit risk components

    Hello @dean zhao The answers and detailed explanations to our daily practice questions are available to our customers who have purchased one of our FRM study packages because these questions are part of our paid practice question sets in the study planner. You can view all of our study packages here: . Thank you, Nicole
    Hello @dean zhao The answers and detailed explanations to our daily practice questions are available to our customers who have purchased one of our FRM study packages because these questions are part of our paid practice question sets in the study planner. You can view all of our study packages here: . Thank you, Nicole
    Hello @dean zhao The answers and detailed explanations to our daily practice questions are available to our customers who have purchased one of our FRM study packages because these questions are part of our paid practice question sets in the study planner. You can view all of our study...
    Hello @dean zhao The answers and detailed explanations to our daily practice questions are available to our customers who have purchased one of our FRM study packages because these questions are...
    Replies:
    2
    Views:
    249
  20. David Harper CFA FRM

    P2.T6.610. Securitization process (Choudhry)

    Hi Nicole, thank you very much! It works now. Best regards, Darya
    Hi Nicole, thank you very much! It works now. Best regards, Darya
    Hi Nicole, thank you very much! It works now. Best regards, Darya
    Hi Nicole, thank you very much! It works now. Best regards, Darya
    Replies:
    4
    Views:
    687
  21. Nicole Seaman

    P1.T3.714. Duration, modified duration and dollar duration (Hull Chapter 4)

    Learning objectives: Calculate the duration, modified duration, and dollar duration of a bond. Evaluate the limitations of duration and explain how convexity addresses some of them. Questions 714.1. A very risky two-year bond with a face value of $100.00 pays a semi-annual coupon of 18.0% and has a yield (yield to maturity) of 15.0% with continuous compounding. Its price is therefore...
    Learning objectives: Calculate the duration, modified duration, and dollar duration of a bond. Evaluate the limitations of duration and explain how convexity addresses some of them. Questions 714.1. A very risky two-year bond with a face value of $100.00 pays a semi-annual coupon of 18.0% and has a yield (yield to maturity) of 15.0% with continuous compounding. Its price is therefore...
    Learning objectives: Calculate the duration, modified duration, and dollar duration of a bond. Evaluate the limitations of duration and explain how convexity addresses some of them. Questions 714.1. A very risky two-year bond with a face value of $100.00 pays a semi-annual coupon of 18.0% and...
    Learning objectives: Calculate the duration, modified duration, and dollar duration of a bond. Evaluate the limitations of duration and explain how convexity addresses some of...
    Replies:
    0
    Views:
    180
  22. Nicole Seaman

    P2.T5.706. Risk-free rate in derivatives valuation and volatility smiles (Hull Chapters 9 and 10)

    Concept: These on-line quiz questions are not specifically linked to learning objectives, but are instead based on recent sample questions. The difficulty level is a notch, or two notches, easier than bionicturtle.com's typical question such that the intended difficulty level is nearer to an actual exam question. As these represent "easier than our usual" practice questions, they are...
    Concept: These on-line quiz questions are not specifically linked to learning objectives, but are instead based on recent sample questions. The difficulty level is a notch, or two notches, easier than bionicturtle.com's typical question such that the intended difficulty level is nearer to an actual exam question. As these represent "easier than our usual" practice questions, they are...
    Concept: These on-line quiz questions are not specifically linked to learning objectives, but are instead based on recent sample questions. The difficulty level is a notch, or two notches, easier than bionicturtle.com's typical question such that the intended difficulty level is nearer to an...
    Concept: These on-line quiz questions are not specifically linked to learning objectives, but are instead based on recent sample questions. The difficulty level is a notch, or two notches, easier...
    Replies:
    0
    Views:
    170
  23. Nicole Seaman

    P1.T3.713. Spot and forward rates in bond pricing (Hull Chapter 4)

    Learning objectives: Calculate the theoretical price of a bond using spot rates. Derive forward interest rates from a set of spot rates. Derive the value of the cash flows from a forward rate agreement (FRA). Questions: 713.1. Consider the steep spot (aka, zero) rate curve illustrated below: 3.0% at 0.5 years, 4.0% at 1.0 year, 4.6% at 1.5 years and 5.0% at 2.0 years. Each of these zero...
    Learning objectives: Calculate the theoretical price of a bond using spot rates. Derive forward interest rates from a set of spot rates. Derive the value of the cash flows from a forward rate agreement (FRA). Questions: 713.1. Consider the steep spot (aka, zero) rate curve illustrated below: 3.0% at 0.5 years, 4.0% at 1.0 year, 4.6% at 1.5 years and 5.0% at 2.0 years. Each of these zero...
    Learning objectives: Calculate the theoretical price of a bond using spot rates. Derive forward interest rates from a set of spot rates. Derive the value of the cash flows from a forward rate agreement (FRA). Questions: 713.1. Consider the steep spot (aka, zero) rate curve illustrated below:...
    Learning objectives: Calculate the theoretical price of a bond using spot rates. Derive forward interest rates from a set of spot rates. Derive the value of the cash flows from a forward rate...
    Replies:
    0
    Views:
    171
  24. Nicole Seaman

    P1.T3.712. Interest rate fundamentals (Hull Chapter 4)

    Hello @hulan1991 The answers and detailed explanations are accessible to members who have purchased one of our FRM study packages. If you would like full forum access, here are the study packages that we offer in case you are interested :) Nicole
    Hello @hulan1991 The answers and detailed explanations are accessible to members who have purchased one of our FRM study packages. If you would like full forum access, here are the study packages that we offer in case you are interested :) Nicole
    Hello @hulan1991 The answers and detailed explanations are accessible to members who have purchased one of our FRM study packages. If you would like full forum access, here are the study packages that we offer in case you are interested :) Nicole
    Hello @hulan1991 The answers and detailed explanations are accessible to members who have purchased one of our FRM study packages. If you would like full forum access, here are the study...
    Replies:
    2
    Views:
    282
  25. Nicole Seaman

    P2.T5.705. Tuckman's term structure models

    Concept: These on-line quiz questions are not specifically linked to learning objectives, but are instead based on recent sample questions. The difficulty level is a notch, or two notches, easier than bionicturtle.com's typical question such that the intended difficulty level is nearer to an actual exam question. As these represent "easier than our usual" practice questions, they are...
    Concept: These on-line quiz questions are not specifically linked to learning objectives, but are instead based on recent sample questions. The difficulty level is a notch, or two notches, easier than bionicturtle.com's typical question such that the intended difficulty level is nearer to an actual exam question. As these represent "easier than our usual" practice questions, they are...
    Concept: These on-line quiz questions are not specifically linked to learning objectives, but are instead based on recent sample questions. The difficulty level is a notch, or two notches, easier than bionicturtle.com's typical question such that the intended difficulty level is nearer to an...
    Concept: These on-line quiz questions are not specifically linked to learning objectives, but are instead based on recent sample questions. The difficulty level is a notch, or two notches, easier...
    Replies:
    0
    Views:
    162
  26. Nicole Seaman

    P1.T3.710. Long and short hedges (Hull Chapter 3)

    @shice I agree with you (and the correct answer agrees with you)! :) We are following Hull here with strict definitions of the basis, where basis = S(0) - F(0); and "short hedge" refers simply to a hedge that employs a short (futures) position as the hedge instrument. So, short hedge can be associated with either negative or positive basis.
    @shice I agree with you (and the correct answer agrees with you)! :) We are following Hull here with strict definitions of the basis, where basis = S(0) - F(0); and "short hedge" refers simply to a hedge that employs a short (futures) position as the hedge instrument. So, short hedge can be associated with either negative or positive basis.
    @shice I agree with you (and the correct answer agrees with you)! :) We are following Hull here with strict definitions of the basis, where basis = S(0) - F(0); and "short hedge" refers simply to a hedge that employs a short (futures) position as the hedge instrument. So, short hedge can be...
    @shice I agree with you (and the correct answer agrees with you)! :) We are following Hull here with strict definitions of the basis, where basis = S(0) - F(0); and "short hedge" refers simply to a...
    Replies:
    3
    Views:
    314
  27. Nicole Seaman

    P2.T5.704. Cardinal and ordinal (rank) correlation measures

    Concept: These on-line quiz questions are not specifically linked to learning objectives, but are instead based on recent sample questions. The difficulty level is a notch, or two notches, easier than bionicturtle.com's typical question such that the intended difficulty level is nearer to an actual exam question. As these represent "easier than our usual" practice questions, they are...
    Concept: These on-line quiz questions are not specifically linked to learning objectives, but are instead based on recent sample questions. The difficulty level is a notch, or two notches, easier than bionicturtle.com's typical question such that the intended difficulty level is nearer to an actual exam question. As these represent "easier than our usual" practice questions, they are...
    Concept: These on-line quiz questions are not specifically linked to learning objectives, but are instead based on recent sample questions. The difficulty level is a notch, or two notches, easier than bionicturtle.com's typical question such that the intended difficulty level is nearer to an...
    Concept: These on-line quiz questions are not specifically linked to learning objectives, but are instead based on recent sample questions. The difficulty level is a notch, or two notches, easier...
    Replies:
    0
    Views:
    134
  28. Nicole Seaman

    P1.T3.711. Optimal cross-hedge and reducing portfolio beta (Hull Chapter 3 continued)

    Learning objectives: Define cross hedging, and compute and interpret the minimum variance hedge ratio and hedge effectiveness. Compute the optimal number of futures contracts needed to hedge an exposure, and explain and calculate the “tailing the hedge” adjustment. Explain how to use stock index futures contracts to change a stock portfolio’s beta. Explain the term “rolling the hedge forward”...
    Learning objectives: Define cross hedging, and compute and interpret the minimum variance hedge ratio and hedge effectiveness. Compute the optimal number of futures contracts needed to hedge an exposure, and explain and calculate the “tailing the hedge” adjustment. Explain how to use stock index futures contracts to change a stock portfolio’s beta. Explain the term “rolling the hedge forward”...
    Learning objectives: Define cross hedging, and compute and interpret the minimum variance hedge ratio and hedge effectiveness. Compute the optimal number of futures contracts needed to hedge an exposure, and explain and calculate the “tailing the hedge” adjustment. Explain how to use stock index...
    Learning objectives: Define cross hedging, and compute and interpret the minimum variance hedge ratio and hedge effectiveness. Compute the optimal number of futures contracts needed to hedge an...
    Replies:
    0
    Views:
    152
  29. Nicole Seaman

    P2.T5.703. VaR backtest and VaR mapping

    Concept: These on-line quiz questions are not specifically linked to learning objectives, but are instead based on recent sample questions. The difficulty level is a notch, or two notches, easier than bionicturtle.com's typical question such that the intended difficulty level is nearer to an actual exam question. As these represent "easier than our usual" practice questions, they are...
    Concept: These on-line quiz questions are not specifically linked to learning objectives, but are instead based on recent sample questions. The difficulty level is a notch, or two notches, easier than bionicturtle.com's typical question such that the intended difficulty level is nearer to an actual exam question. As these represent "easier than our usual" practice questions, they are...
    Concept: These on-line quiz questions are not specifically linked to learning objectives, but are instead based on recent sample questions. The difficulty level is a notch, or two notches, easier than bionicturtle.com's typical question such that the intended difficulty level is nearer to an...
    Concept: These on-line quiz questions are not specifically linked to learning objectives, but are instead based on recent sample questions. The difficulty level is a notch, or two notches, easier...
    Replies:
    0
    Views:
    349
  30. Nicole Seaman

    P2.T5.702. Nonparametric value at risk (VaR)

    Concept: These on-line quiz questions are not specifically linked to learning objectives, but are instead based on recent sample questions. The difficulty level is a notch, or two notches, easier than bionicturtle.com's typical question such that the intended difficulty level is nearer to an actual exam question. As these represent "easier than our usual" practice questions, they are...
    Concept: These on-line quiz questions are not specifically linked to learning objectives, but are instead based on recent sample questions. The difficulty level is a notch, or two notches, easier than bionicturtle.com's typical question such that the intended difficulty level is nearer to an actual exam question. As these represent "easier than our usual" practice questions, they are...
    Concept: These on-line quiz questions are not specifically linked to learning objectives, but are instead based on recent sample questions. The difficulty level is a notch, or two notches, easier than bionicturtle.com's typical question such that the intended difficulty level is nearer to an...
    Concept: These on-line quiz questions are not specifically linked to learning objectives, but are instead based on recent sample questions. The difficulty level is a notch, or two notches, easier...
    Replies:
    0
    Views:
    229

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