Week in Financial Education (June 28, 2021)
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 in all of Part 2. For the Part 2 PQs, I wrote a few sets of questions on Bodie’s style analysis, namely this is the attribution of portfolio performance into asset allocation versus security selection. Have a good study week
Our New Accelerated CFA Level 1 Prep
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 in all of Part 2. For the Part 2 PQs, I wrote a few sets of questions on Bodie’s style analysis, namely this is the attribution of portfolio performance into asset allocation versus security selection. Have a good study week.
1. P1.T3.21.5. Moral hazard and insurance company premiums https://trtl.bz/3qusAeF
2. P2.T9.21.11. Style analysis https://trtl.bz/3h4Zcc9
1. [FRM] Are the exam questions restricted to learning objectives (LOs)? https://trtl.bz/3w6qQK4
2. [P1.T3] Still don’t see how domestic/foreign distinction is helpful for interest rate parity (IRP) https://trtl.bz/3x15OxD
3. [P1.T4] The bond VaR risk factor is basis-point volatility https://trtl.bz/360d00Q
4. [P1.T4] Thank you bossland9 for identifying forward formula typo https://trtl.bz/3wZntpi
5. [P1.T4] This old key rate question by me is not good https://trtl.bz/3qwp5nX
6. [P2.T5] The investor coupon in a pass-through MBS has three components (interest, scheduled principal, and unscheduled principal due to prepayments) https://trtl.bz/35WAgNm
7. [P2.T5] The definition of expected discounted value in binomial rate trees https://trtl.bz/3h62WbY
8. [P2.T5] The effect of volatility and risk aversion on bond price https://trtl.bz/3jjLbsk
9. [P2.T6] Is counterparty expected exposure (EE) additive? https://trtl.bz/3y1D3Rg
10. [P2.T7] Does RAROC capture systematic risk? https://trtl.bz/3A65obh
11. [P2.T7] Is VaR good for ranking portfolios? https://trtl.bz/35XHMYh
Curated Links (items you might like)
- [BIS] Financial benchmarks – Executive Summary https://www.bis.org/fsi/fsisummaries/financial_benchmarks.htm
- [Fed] Federal Reserve’s Dodd-Frank Act Stress Test (DFAST) results https://trtl.bz/3y0DJXq
- [GARP] Faster Payments Pick Up Momentum in the U.S https://trtl.bz/3quLX7k
- [BIS] Annual Economic Report 2021 https://www.bis.org/publ/arpdf/ar2021e.htm
- Key Changes in the 2021 ISDA Interest Rate Derivatives Definitions https://trtl.bz/3vZWusC
- Avoiding Disaster with Catastrophe Bonds? https://trtl.bz/3gZuS2j
- Model life-cycle transformation in the next decade (McKinsey) https://trtl.bz/3wab013
- Repressed Repo Rates: Sifting Through the Noise https://trtl.bz/3qrId6M
- [Bank Underground] Procyclicality mechanisms in the financial system: what we know and some open questions https://trtl.bz/363aEyh
- Idiots, Maniacs & the Complexities of Risk https://trtl.bz/3wWIHUO
- [Norman Marks] ERM and the Internal Audit Plan https://trtl.bz/3qyrDSS;
- Can internal auditors audit cyber or risk management? https://trtl.bz/2StJwW6
- RiskGrade: A More Intuitive Way to Calculate Investment Risk https://trtl.bz/2Swc3dP
- Managing Model Risk http://managingmodelriskbook.com/ I look forward to this book
- Directors Learn Their ESGs https://trtl.bz/35Tsoft
2. Investing & Finance
- [CFA Institute] Covid-19, One Year Later: Capital Markets Entering Uncharted Waters https://trtl.bz/3wWIAbQ (pdf here)
- [Invest Like the Best] Howard Marks – Embracing the Psychology of Investing https://trtl.bz/3w1fkj0
- Calbench.com on SPACs: Part 1, Part 2, and Part 3
- Lord of the Roths: How Tech Mogul Peter Thiel Turned a Retirement Account for the Middle Class Into a $5 Billion Tax-Free Piggy Bank (by ProPublica) https://trtl.bz/3h1uYGV
- [r/wallstreetbets] A Beginner and Intermediate Guide To Options: Everything You Need To Know To Stop Losing Money Like A Complete Tard https://trtl.bz/3xe7DaJ
- What You Need to Know About Inflation https://www.whitecoatinvestor.com/inflation-basics/
- Litigation Finance https://www.netinterest.co/p/litigation-finance and How Litigation Finance Toppled the Fortunes of a Real Housewives Star https://trtl.bz/35TETYL
3. Data, Tech, Cyber & Defi
- Interview: Marc Andreessen, VC and tech pioneer https://noahpinion.substack.com/p/interview-marc-andreessen-vc-and
- Crypto’s Top V.C. Is Playing the Long Game (NYT) https://trtl.bz/3qwwMKQ
- Down the Rabbit Hole: A Cryptocurrency Primer https://trtl.bz/3x3fcR8
- Notes from the 3rd Insurance Data Science event https://trtl.bz/3x2vf1F
- Why Data Culture Matters https://www.datacamp.com/community/blog/why-data-culture-matters
Before the organization decides to allocate time, effort, and money into building a data culture, it is important that they make sure to clarify three main factors.
- Define your value: Why does an organization exist, and how does it maximize value for its customers?
- Measure deviation: what type of data is available and needed, and how can it be leveraged to further maximize value for customers?
- Appropriate re-prioritization and intervention: What should the organization do differently to develop the capabilities to extract value from data at scale?
Week in Financial Education (May 17, 2021)
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...
Week in Financial Education (May 10, 2021)
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...
Week in Financial Education (May 3, 2021)
Hello, welcome to another WIFE! Our FRM forum was super busy last week. I wrote a long reply to the question (link below) about the...
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