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Exam Feedback November 2020 Part 1 Exam Feedback

thanhtam92

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I find it hard to resist deliberating but ultimately for your own sanity you have to stop because even right after putting your pencil down it's easy for your memory to start changing after second-guessing. :) We don't know what the pass score will be and we'll never know how we did on each question.
Hopefully the cutoff wont be too high.
 

mathieudochy

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I thought that overall it was a little more difficult than I was expected. The level of difficulties was more similar to BT than the GARP questions and mock exam. I wasn't surprised by the quantitative questions but a lot by the theoretical ones, a few overthrew me and thought they had very close or similar answers making it more difficult to choose.
The logistics were as expected, changing masks, as it was mentioned I don't believe it's the best move as the one they were giving us were not as good as the one we brought. It was a show to enter or leave the room, checking your socks and glasses. It's fine, it's just very very strict.
In Mexico City we were between 6 and 8 per room, splitter in 3 different rooms ~20px in total.
BT helped a lot during the preparation of the exam, making it more efficient to answer and it took me in total 3h40 minutes to complete the exam, taking 20 extra minutes to review a few doubts I had and making sure all the right bubbles were filled on the answer sheet. Surprisingly you have enough space to write and make note next the questions on the booklet so extra paper really isn't required. Let's wait for the results in January, I'm personally 50/50 and can't tell if I passed or not. Cheers,
 
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sohinichowdhury

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Thank you to all those who took the exam this weekend and remembered some of the stuff. Good luck to you all! Were there any questions on exotic options? And in statistics, did they test on time series and on the less common distributions (other than binomial, passion, uniform and normal)? Seems like the qualitative questions were numerous and some had ambiguous answer choices.
 

LucreziaB

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Thank you to all those who took the exam this weekend and remembered some of the stuff. Good luck to you all! Were there any questions on exotic options? And in statistics, did they test on time series and on the less common distributions (other than binomial, passion, uniform and normal)? Seems like the qualitative questions were numerous and some had ambiguous answer choices.

There was one exotic option question; a pretty simple payoff that you would be able to figure out if you memorized what the option meant. There was also a spread strategy question (David is pretty clear that there's no short cut on this section). There were a few questions on time series and more obscure distributions but they were more conceptual in nature. Like a question where they gave you Cook's distance and asked if it was an outlier; a conceptual question about random walks and mean reversion/dispersion. The sections are worth your time but definitely not worth the depth of interest rates or derivative pricing (which you want to be second nature by the time you sit) especially as GARP doesn't spend much time trying to connect it to other parts of the course.

I find it annoying how much detail they go into on time series considering you don't reuse much of it (other than the GARCH chapter in topic 4) yet it's the longest section in quantitative analysis. It's almost like they were too lazy to think about how to make it a cohesive part of the curriculum so they just turned it into a data dump.
 

ucaksbu

New Member
Now that I think about it if you p, u, and d, you can solve for e^(rt) and therefore r. My instinct is still that they wanted something like this section in Topic 4, Chapter 14 of the GARP text where they calculate delta using changes in the intrinsic value:

View attachment 2969
I don‘t exactly remember the question, but you had to construct a portfolio with options and stocks where the payoff was the same regardless of if stock goes up or down (because that‘s fundamentally what a hedge is) - I don‘t think the risk free rate was relevant
 

voko

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Although I didn't do well in the exam, I can say that questions were not too complicated. The most important thing is to remember the formulas and definitions. Practising is the key to remember. Knowing how to solve but not remembering the exact formula was painful. My strategy to memorize the formulas was rewriting them every day. However I forgot several of them in the exam. I think I am too old to memorize. My main mistake was to skip some formulas (Jacque's beta and calculating delta from binomials) that I thought they were not important. Just memorizing popular equations such as Black Scholes and put call parity is not enough. Memorizing all equations is a must. I hope that the cutoff will not be too high.
 

aalirahman

Member
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Hi- I took the exam in karachi, Pakistan. I feel that the approach of the exam (split between quantitative and qualitative questions) was way different from BT. BT is more focused on complex quantitative problems however the exam did not require those concepts.
The exam was a bit unfair because there were a lot of questions that had two correct answers and I had no idea about cook's distance and jaque bera correlation.

The exam did not test on swaps, exotic options, MA, AR or ARMA models and convexity however there were 3-4 questions on CAPM and APT. There was one question on duration hedging: Portfolio value decreases from 850,000 to 750,000 with a 100bps increase in interest rates and the hedging instrument has a duration of 9.04. I marked ( 850,000-750000/850000 * 0.01 = 11.76 - >11.76/9.04 * 850,000 = 1,105,752 (sell the hedging bond). I'm assuming that was the correct answer. I struggled through most of the qualitative questions as BT was more of a quantitative practice for me.


For a person like me, who had solved BT questions thrice, the exam seemed to be quite subjective and different from what I thought it to be. You can easily solve the BT mock exam if you've thoroughly practiced the questions however I would not say the same about the final exam.
 
The exam was okay except that there was a digress from the expected. Off the top of my head, I could recall questions from the following topics:

1. ERM
2. Calculations on CAPM (given just the risk premium)
3. Difference between APT and CAPM
4. Ranking using treynor
5. Sharpe ratio
6. GARP code of conduct
7. LTCM
8. Risk appetite
9. Fama-french model
10. Lehman Brothers
11. Rating agencies ( I think I saw something on this)
12. Two probability questions (1 on Bayes rule and the other on conditional probability with replacement)
13. Distributions (binomial, poisson, student's T)
14. Hypothesis testing
15. Cook distance
16. Non-stationary time series (random walk, unit roots)
17. Jarque-Bera test
18. Confidence interval
19. Define benefit pension plan
20. Originate to distribute model
21. Variation, maintenance and initial margin
22. Optimal number of contract
23. Forward rates
24. Bond duration
25. Lots of questions on foreign exchange markets
26. Interest rate parity
27. Mortgages and MBS
28. Cheapest to deliver
29. Option trading strategies (butterfly option)
30. Put call parity
31. BSM with dividend
32 Exotic options
33. Calculations on VaR and ES
34. Subadditivity
35. VaRr of a portfolio
36. Updated correlation/covariance
37. Hazard rate
38. Calculation of bond price using bootstrapping
39. Law of one price
40. Bond spread
41. Carry roll down assumptions
42. Wrong way risk
43. American styled binomial option pricing
44. Greeks

The exam mirrored the GARP' s practice questions infact a question was repeated from it. The BT team did well in preparing her users (their questions were quite challenging and sometimes discouraging because I felt like my effort was been downplayed each time I attempted the question pack; it was all part of the preparation).

The exam required in depth study of the learning objectives and proper knowledge of the concepts. It was 50% qualitative and 50% quantative.

I really can't say how well I did. Hoping for the best in January.

I hope this helps.
 
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thanhtam92

Member
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Does anyone know that you still have to have valid FRM membership to be able to receive the results of the exam? My membership just expired.
 

mathieudochy

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They appear to have changed the date of the results release to January 4th, 2021. They must have realised and taken into account what happened with the results of the October exams, and anticipe they won't be able to share them on January 1st, a public holiday right before a weekend.
 

nicholasjalonso

New Member
Subscriber
Does anyone know that you still have to have valid FRM membership to be able to receive the results of the exam? My membership just expired.

I sent an email out regarding this, and got this note back. "Please note that membership is not required in order to pursue or maintain your FRM certification, but it does provide you with access to a network of FRM certification holders around the world. Some find value in being a part of this global network. "
 

robert92desantis

New Member
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are results released jan 4 or jan 5? i got an email on dec 18 saying results will be released on jan 5 but garp website says jan 4. anyone get their results?
 

arnaudp

New Member
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are results released jan 4 or jan 5? i got an email on dec 18 saying results will be released on jan 5 but garp website says jan 4. anyone get their results?
I got the same email as you. I'm still pending my results as of right now. I assume the results will be communicated sometimes tomorrow (05th January 2021)
 

Campaigner

New Member
Does anyone have their email adress where my attorney can contact them? What GARP is doing is in my eyes just scam. Who threats Clients like this, shouldn't talk to strangers - it still hurts how I had to fight the proctors back in November.
 
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