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Query - Contractually Promised Gross Return

Thread starter #1
Very Good Morning David,

Where are you? Am getting all worried in your absense. There isn't anyone to solve my queries anymore :)

This concept was easy including the formula. Just one thing which I was wondering as to why am doing. Why do we have +1 on both the side of the equation? Any specific reason? Is that +1 going to impact any kind of scenario?

Thanks in anticipation that I once again find your nice clarification messages, when I get up in the morning.

wishes, Avi.

(Heard about Jaguar's Subprime issue today on TV18 - is it a big issue?)

David Harper CFA FRM

David Harper CFA FRM
Staff member
Hi Avi,

Funny! I saw your other queries, it is crunch time so I may not get to non-FRM queries, as much as I would like :)

(I actually spend my spare time writing questions - trying to put up as many really good practice questions as possible. Doing Basel set now. As you know i don't just post up last years questions, I rewrite to key exactly to the new LOs)

Re the '1 +' I don't know exactly why Saunders does that but it is a good convention in my view. Of course, the 1+ on each side in unnecessary. But this is very common in performance attribution; e.g., portfolio - benchmark: (1+r) - (1+b) and all variations.

The reason I like it is: I don't have to think about whether to input a 1.14 or a 0.14 for 14%. Sometimes that does matter in the formula and when they throw the ones out to the side, you aren't going to mistakenly use 1.14 instead of 0.14. So, my best guess is that it is for good 'usability'

(Ford Jaguar? Or is Jaguar a fund? Sorry, no, I didn't see that yet. I am missing the market a bit lately. My head is in the sand, I have nothing in autos....)

Thread starter #3
Okay great! Got it now.

Hey David!, I got a few genuine queries under Market Risk as well. Can you look into? You can disregard my non-FRM queries out there. ;)

Thanks a ton,

P.S. -> Appreciate all your efforts regarding the CRAM session preps. I am looking forward to it but before you release it, I wish to do a thorough reading of the complete course once again. When are you going to release the CRAM? In early november? Would that be sufficient as far as practicing and grilling ourselves is concerned? Do keep updating me as I am an amateur in Risk and making all possible efforts to penetrate this field. Thanks once again!

David Harper CFA FRM

David Harper CFA FRM
Staff member

Of course, will do.

Cram session release is November 2nd. (as you know, the regular videos are finished). So it gives two weeks to view (but I'll try and put the slides up earlier).

Cram isn't meant to replace regular preparation, only to give a refresher boost...

Plus i will keep adding practice questions right up to the exam, basically...

Thanks, David