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Schroeck, Chapter 5, pp. 170-186 only: Capital Structure in Banks

kate18233

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Referring to the Chapter 5 note of Topic 4, come across an example that used Ong reading as a reference. Tried to locate the Ong reading but most related threads have been removed.

May i know where is the Ong reading in the study planner and how important is this topic?


For example, a two-asset portfolio:
.....

In this example, based on the previously assigned Ong reading (which is exactly the same logic as this Schroeck), we build-up to the adjusted exposure (AE) for each loan. Specifically, AE = outstanding (O/S) + unused commitment * UGD; e.g., AE (exposure #1) = $5.0 million O/S + 50%*$10.0 million = $10.0 million AE.


Thank you.
 

David Harper CFA FRM

David Harper CFA FRM
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#2
Hi @kate18233 I don't know about removed threads (we don't delete threads as a general rule) but here is the (pdf of) Ong text https://www.bionicturtle.com/forum/resources/internal-credit-risk-models-by-michael-ong.131/

It was GARP's previous assignment for fundamental credit risk concepts, in particular EL (= EAD * PD * LGD), UL, portfolio EL and UL. In Part 1, it was replaced by Schroeck Chapter 5 (P1.T4) and in Part 2, it was replaced by De Laurentis Chapter 2 & 3 (P2.T6). Consequently, the Ong is not necessary. However, it's simply a superior text on its topics; e.g., a gradual, theoretical robust introduction.

In my opinion, Part 1 candidates should not worry/bother it: as the comment mentions, Schroeck is the same, and Schroeck is good. The problem for Part 2 candidates is that the De Laurentis is not good, and still contains material mistake(s), as I understand. We are hoping that the 2019 syllabus will incorporate our suggestions to remedy the problems in Part 2. I hope that's helpful,
 

kate18233

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Hi@David Harper CFA FRM, It is helpful, thank you for your response. May i ask if i run out of time to do all the practice questions of related topics in study planner, can i jump straight to practise Mock Exam practice questions from F to A? Any advice on which practice sets should I prioritise? Thank you
 

flosoma

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#4
Hi @kate18233, maybe i can add some information to your questions. (Funny thing is, that i completed Schroeck yesterday, thats why i looked into that post ;))
First of all, i think doing a lot of practice questions is a good idea. If you want/need help with focussing, try Davids Focus Review Posts (not the Videos), e.g. https://www.bionicturtle.com/forum/threads/p1-focus-review-7th-of-8-valuation.6509/ which i think help a lot. Also my next big step is analyzing the threads about the last exams and do some practice exams, which can also be found in the forum (i do not have a quick link though).

I hope this helps. If there is anything i did miss, feel free to add information :)
 
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