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# Exam FeedbackOctober 2020 Part 2 Exam Feedback

#### SheOlya

##### Member
Core tier 1 capital is pure equity

#### SheOlya

##### Member
Ahh I see.
Do you recall the RAROC question which had transfers of 1.5%? Think the answer options for % was between 10-26%. This had me stumped as I couldn't get it to work if I took transfers into consideration.
It is possible I chose the closest number. I took transfers with minus.

#### anton.mahkats

##### New Member
Core tier 1 capital is pure equity
The problem is that it's not really. CET1 is pure equity and it stands for Core Equity Tier 1. Core Tier 1 is not very precise at all, unless it was designed to get people confused (the strategy which seemingly worked well).

#### goodbunny

##### New Member
It is possible I chose the closest number. I took transfers with minus.
Yes, even I subtracted as it was a charge. But not sure why the the answer didn't match the options given.
(Return on loan (15) + return on ec (1)-el (5) - op cost(35%}- taxes -transfers 1.5%)/Econ capital is what I used

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#### SheOlya

##### Member
Yes, even I subtracted as it was a charge. But not sure why the the answer didn't match the options given.
(Return on loan + return on ec-el - op cost- taxes -transfers)/Econ capital is what I used
I used (Return on loan + return on ec-el - op cost-transfers)(1-tax rate)/Econ

#### SheOlya

##### Member
Do you remember a question about netting benefit?

#### mcrisk7

##### Member
Do you remember a question about netting benefit?

I merely remember a question where MtM with and without netting was given and we had to compute the netting benefit.

#### goodbunny

##### New Member
Do you remember a question about netting benefit?
Hmm not sure, was it one comparing before and after netting?

#### chintanmatalia

##### Member
I didn’t come across question where we were supposed to calculate netting benefit. There was surely a theoretical question but not quantitative.

#### chintanmatalia

##### Member
There was a hedge fund question relating to biases, I selected measurement bias as it includes many biases. Not sure whether it is correct.

#### VWJETTY

##### Active Member
Now I remember that question as well. The answer was POT has extra parameter which I thought indeed is wrong. As usual I do not fully remember the answers in all these qualitative questions. Another answer I think something like for high threshold GET is better option. Also something like at infinity 'it' becomes normal distribution.

Yeah I think the POT has an extra parameter, I think that's the one I chose, although I was iffy on the other option.

There was a hedge fund question relating to biases, I selected measurement bias as it includes many biases. Not sure whether it is correct.

What was the other options? I don't think I chose measurement bias. I think I chose the one that had 'early selection bias'? Forgot exactly. But that's the one I chose.

#### shuairan82

##### Member
I remember only some questions:

20. Ho - Lee model

I think the starting value was 2.6%, the question was, what is the interest rate in the lowest node after two periods. Lambda 1 and 2 were given as p.a. values (I think 9 and 6), so I divided them by 12.

#### VWJETTY

##### Active Member
I think the starting value was 2.6%, the question was, what is the interest rate in the lowest node after two periods. Lambda 1 and 2 were given as p.a. values (I think 9 and 6), so I divided them by 12.

I got stumped on that. Umm...yeah, was it divide by 12 or the sqrt of 12? Gosh i blanked on that one (sigh)

Also who else got a feedback e-mail requests from GARP. I'm probably gonna lay it on them pretty rough I think as im still mulling it over how I thought about the exam overall.

#### Eustice_Langham

##### Active Member
was quite angry at Garp during the exam. There were definitely 3-5 questions that were super biased wherein 2 answers were correct (qualitative). Otherwise, yeah, much tougher than on any test mock exams, they raised the bar quite much with those Part 2 changes they made
How do you mean super biased?

#### Eustice_Langham

##### Active Member
I got stumped on that. Umm...yeah, was it divide by 12 or the sqrt of 12? Gosh i blanked on that one (sigh)

Also who else got a feedback e-mail requests from GARP. I'm probably gonna lay it on them pretty rough I think as im still mulling it over how I thought about the exam overall.
I received one....really trying to be diplomatic in my responses, but feel that GARP have dropped the ball in the last 12 months

#### goodbunny

##### New Member
Yeah I think the POT has an extra parameter, I think that's the one I chose, although I was iffy on the other option.

What was the other options? I don't think I chose measurement bias. I think I chose the one that had 'early selection bias'? Forgot exactly. But that's the one I chose.

I think q was abt an analyst going through a database of returns. What were the limitations? Or is that a different q?

#### chintanmatalia

##### Member
I think q was abt an analyst going through a database of returns. What were the limitations? Or is that a different q?
You are referring to same question

#### SheOlya

##### Member
You are referring to same question
I remember I chose measurement bias but I am not sure it was a correct answer, I went fast through that question.

#### SheOlya

##### Member
I think the starting value was 2.6%, the question was, what is the interest rate in the lowest node after two periods. Lambda 1 and 2 were given as p.a. values (I think 9 and 6), so I divided them by 12.
This question was about lowest node. So it was just r0+(lambda1+lambda2)/12-2sigma/sqrt(12)

#### SheOlya

##### Member
Was it a lot of people present during your exam? I was a bit shocked. In my location there were 55 tables in one of the rooms where I was sitting but we were only 9 people present.

I guess the results are coming around December 5th...

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