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  1. David Harper CFA FRM

    Introduction to the Quantitative Foundation of Risk

    A common question asked by FRM candidates (and people who are considering whether to sit for the FRM exam) is, where can I find an introduction to the math? Although the FRM has many qualitative and conceptual topics, it also contains a lot of formulas and numerical illustrations. The CFA, by...
  2. David Harper CFA FRM

    WIFE Week in Financial Education (2021-06-27)

    Welcome to the latest WIFE. For Part 1, we wrote a new set of insurance company practice questions (PQs). I was recently asked how much insurance is assigned in the FRM. Surprisingly little. You might expect insurance to be prevalent in Operational Risk (P2.T7) but it makes but three appearances...
  3. David Harper CFA FRM

    WIFE Week in Financial Education (2021-06-20)

    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...
  4. David Harper CFA FRM

    WIFE Week in Financial Education (2021-06-14)

    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...
  5. David Harper CFA FRM

    WIFE Week in Financial Education (2021-06-07)

    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...
  6. David Harper CFA FRM

    P1.T3.21.2. Investment banks

    Learning outcomes: Describe investment banking financing arrangements including private placement, public offering, best efforts, firm commitment, and Dutch auction approaches. Describe the potential conflicts of interest among commercial banking, securities services, and investment banking...
  7. David Harper CFA FRM

    WIFE Week in Financial Education (2021-05-24)

    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...
  8. David Harper CFA FRM

    WIFE Week in Financial Education (2012-05-17)

    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...
  9. David Harper CFA FRM

    WIFE Week in Financial Education (2021-05-10)

    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...
  10. David Harper CFA FRM

    WIFE Week in Financial Education (2021-05-03)

    Hello, welcome to another WIFE! The 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...
  11. David Harper CFA FRM

    WIFE Week in Financial Education (2021-04-19)

    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...
  12. David Harper CFA FRM

    P1.T2.21.2. Unit roots and Dickey-Fuller

    Learning objectives: Explain the challenges of modeling time series containing unit roots. Describe how to test if a time series contains a unit root. Explain how to construct an h-step-ahead point forecast for a time series with seasonality. Calculate the estimated trend value and form an...
  13. David Harper CFA FRM

    WIFE Week in Financial Education (2021-04-12)

    I hope you enjoy my latest non-stationary time series (TS) question set (T2.21.1. below). As with 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 with a function call. In that regard, I...
  14. David Harper CFA FRM

    P2.T9.21.1. Factor regression and style analysis

    Learning outcomes: Describe Grinold’s fundamental law of active management, including its assumptions and limitations, and calculate the information ratio using this law. Apply a factor regression to construct a benchmark with multiple factors, measure a portfolio’s sensitivity to those factors...
  15. David Harper CFA FRM

    P1.T2.21.1. Nonlinear time trends and unit roots

    Learning objectives: Describe linear and nonlinear time trends. Explain how to use regression analysis to model seasonality. Describe a random walk and a unit root. Questions: 21.1.1. The following seasonal dummy model estimates the quarterly growth rate (in percentage terms) of housing...
  16. David Harper CFA FRM

    Week in Financial Education (2021-04-05)

    In the forum (beginners/new learners) Whose definition of DV01 is correct, Tuckman or GARP? https://www.bionicturtle.com/forum/threads/dv01-definition-clarification-needed-extreme-mental-emergency.23751/ Which sample skew should be used? (answer: either)...
  17. David Harper CFA FRM

    Week in Financial Education (2021-03-29)

    Hello valued visitors! We're bringing back Week in Risk but calling it Week in Financial Education until we find a better title. Maybe you noticed our exciting news? We recently joined CeriFi and look forward to broadening this forum's reach. The idea is to share a brief blog-like update from...
  18. David Harper CFA FRM

    Our new Accelerated CFA Level 1 Prep (Part 1: The Formula Practice Generator)

    Hello members and visitors! We blogged here https://www.bionicturtle.com/our-new-accelerated-cfa-level-1-prep/ about our new Accelerated CFA Level 1 Prep Program. In this thread, I want to share some highlights about this program. Richie Owens is the instructor, and he deserves his world-class...
  19. David Harper CFA FRM

    We have been acquired by CeriFi

    I wanted to share some exciting news: Bionic Turtle has been acquired by CeriFi. You can read the press release here https://www.prnewswire.com/news-releases/cerifi-a-portfolio-company-of-leeds-equity-partners-completes-acquisition-of-bionic-turtle-301242071.html. I started BT over 15 years ago...
  20. David Harper CFA FRM

    P2.T10.20.5. The Rise of Digital Money

    Learning objectives: Describe the characteristics of e-money that could propel a rapid global adoption of this type of money. Describe the risks faced by the banking sector as e-money adoption increases. Evaluate regulatory and policy actions that could be implemented in response to risks...
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