Bionic Turtle’s Week in Risk (ending March 5th)

We’ve had a great week here at Bionic Turtle! We added new practice questions to our forum, and we also published new practice question sets and study notes in the study planner for all of our subscribers. The BT forum has been very busy! Make sure to stop by our forum to participate in our financial risk discussions. It is the best place to get quick, in-depth answers to all of your FRM content questions! We hope that you enjoy reading through all of these great articles that David has compiled for our Week in Risk blog this week. 🙂

New Practice Questions

Illiquidity risk premium

In the forum this week (selected only)

Balance sheet leverage (Malz)

Banks and regulations

Bank penalties

International

  • China’s Hidden Risks Rise https://www.bloomberg.com/view/articles/2017-03-06/china-s-hidden-risks-riseThey’re trying to establish a market in credit-default swaps, to better price and manage credit risk. They’re imposing some mild new restrictions on WMPs [wealth-management products: short-term, high-yielding investments that are issued by banks. The market for such products is now worth close to $4 trillion, or nearly 40 percent of China’s gross domestic product. Banks are heavily reliant on them for liquidity, and investors have come to view them as more or less risk-free, thanks to previous government bailouts], meant to rein in new issuance. Officially, even corporate defaults are up, suggesting that the government is finally getting serious about imposing losses on investors.

Technology, including FinTech and Cybersecurity

Ethereum

cyber readiness

Exams, Financial Associations (GARP, FRM, CFA Institute) and Careers, including CRO Interviews

  • PRMIA’s Feb Issue of Intelligent Risk http://trtl.bz/prmia-intelligent-risk-feb-2017
  • Are Risk Managers Ready for Artificial Intelligence? By GARP (Surveys and interviews indicate widespread understanding of AI technology’s foundational significance, yet few use it or appreciate the risks of adoption or non-adoption) http://trtl.bz/2mf7qBU

Risk Intelligence

Other

Financial reporting, including Accounting and Audit

Case Studies and Companies, including Strategic or Reputation risk

Risk Foundations (FRM P1.T1)

global risk management

Quantitative Analysis (FRM P1.T2)

Financial Markets and Products, including Interest Rates, Commodity Risk, and Foreign Exchange (FX)(FRM P1.T3)

central counterparty default waterfall

short selling

catastrophe

Credit risk (FRM P1.T6)

credit default swaps

Investment risk, including Pensions (FRM P1.T8)

  • Inside Harvard’s Radical Plan to Reverse a Decade of Poor Returns https://www.wsj.com/articles/inside-harvards-radical-plan-to-reverse-a-decade-of-poor-returns-1488277804In the past, Harvard Management Co. had staffers specialize in different areas, like real estate. Now, Harvard will use a generalist approach where staffers look across the entire portfolio to make investment decisions … Harvard will also invest by focusing on the types of risks that different investments present instead of earmarking specific allocations to asset classes.

Harvard

 

Interest rate risk

total return

Current issues (FRM P2.T9)

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