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    Pricing Rule Query

    Hi David - Can you please help me on this? Thanks, Avi
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    Pricing Rule Query

    Dear David Trust all well! I have renewed BT again and looks excellant this time. Can you provide me with a link where I can view or download the Early Bird 1 - 3? I have a doubt non-related to the FRM curriculum and hence couldn't understand where to put up on the forum. I need some...
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    Hi!

    Suk - Do you have access to Bloomberg? Avishek.
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    Comparision between binomial and BSM model

    Greetings Harish, I am sure that David will come up with better concepts and ideas behind your query. But, I would like to provide my inputs as well to make the forum more interactive. Would also expect you to provide your ideas to my queries or concepts in days to come. Well, I am...
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    FRM round the corner

    Hi David - Thanks for your time and consideration. Every post of yours come in as a motivating factor. Here are a few things which I want to know or put across. @ Since you are developing the forum and must be under production, is it okay for me to put across some ideas or queries across...
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    FRM round the corner

    David - Also can you hunt these guys down and tell them to stop doing illegal sales? http://www.elitebook.net/frm.asp Thanks, Avishek
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    FRM round the corner

    (This is just a copy of the email I had sent across yesterday - would be looking forward to hear from you.) Dear David, Trust all well! It's been almost an year since I last posted any update. Not that it had to do with too much of work, but to some extent yes. After the not-so-shocking...
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    Query - Key Rate Exposure

    Thanks a lot David. Got a bit confused!
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    Query - Duration

    No David, This is certainly not from Bionic. It is from the Schwesers Pro Software. I went by elimination and found only D to be the last best option. Regarding option (B) I had doubts but clarified now. Thanks again, Avi
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    Query - Key Rate Exposure

    Also I didn't understand the direction of the Price. It's contradicting the thumb rule which states: "Coupon Rate > YTM will lead to Price > Par Value and vice versa" The Video clearly contradicts that scenario - even when am computing the Price gives me a value less than the PAR of...
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    Query - Key Rate Exposure

    Hi David In your video under LO 24.3 Example shown, you have mentioned "security" FV is 0, which is normally the case for "Mortgage Security". In case it was a normal security, the FV should have been $ 100,000 right? Please explain. Thanks, Avi P.S. Is key rate exposures calculated...
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    Query - Duration

    I guess am wrong. Duration comes in years!
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    Query - Duration

    Hi David, Please take a look at the below Question. I have a feeling that I was correct. Duration has no Unit while the Yield should be decreasing with increasing Duration. Only Macaulay Duration has unit. Am I correct on this? Correct me please if am wrong. Question: Which of the following...
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    Point to Remember 34

    A financial intermediary that has credit risk as the primary risk exposure is a: A) hedger. B) packager. C) market maker. D) financial engineer. Your answer: C was correct! A market maker attempts to buy and sell the same option but retains the credit risk on...
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    Point to Remember 34

    An investor owns a stock and believes that the stocks price will remain relatively unchanged for the short term but is bullish in the long term. Which of the following strategies will be the best for this investor? A) A covered call. B) A protective put. C) An at-the-money...
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    Point to Remember 34

    The buyer of a straddle on a stock is most likely to benefit: A) if the volatility of the underlying assets price decreases. B) if the position expires worthless. C) under all conditions because the straddle is guaranteed a risk-free rate of return. D) if the volatility...
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    Point to Remember 34

    Crashophobia is often attributed to the: A) U.S. stock market crisis of 1987. B) Asian currency crisis of 1997. C) Long-Term Capital Management systemic crisis of 1998. D) Latin American sovereign debt crisis of 1990. Your answer: A was correct! The term...
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    Point to Remember 34

    Which of the following methods is NOT used for estimating volatility inputs for the Black-Scholes model? A) Models of changing volatility. B) Using long term historical data. C) Using the most current historical data. D) Using exponentially weighted historical data...
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    Point to Remember 34

    Which of the following statements regarding the Black-Scholes-Merton option-pricing model is TRUE? A) The Black-Scholes-Merton option-pricing model is the discrete time equivalent of the binomial option-pricing model. B) The Black-Scholes-Merton model is superior to the binomial...
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    Point to Remember 34

    If we use four of the inputs into the Black-Scholes-Merton option-pricing model and solve for the asset price volatility that will make the model price equal to the market price of the option, we have found the: A) historical volatility. B) market volatility. C) option...
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