Concepts n Clarity CFA FRM Forum - Recent questions without answers
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Powered by Question2AnswerProbability Quant CFA FRM
http://conceptsnclarity.com/question/222/probability-quant-cfa-frm
<p> The following table summarizes the availability of trucks with air bags and bucket seats at a dealership.</p><table cellspacing="0" cellpadding="0" border="1" style="width:330px"><tbody><tr><td><p></p></td><td><p><em>Bucket seats</em></p></td><td><p><em>No Bucket Seats</em></p></td><td><p><em>Total</em></p></td></tr><tr><td><p> Air Bags</p></td><td><p>75</p></td><td><p>50</p></td><td><p>125</p></td></tr><tr><td><p> No Air Bags</p></td><td><p>35</p></td><td><p>60</p></td><td><p>95</p></td></tr><tr><td><p> Total</p></td><td><p>110</p></td><td><p>110</p></td><td><p>220</p></td></tr></tbody></table><p>What is the probability of randomly selecting a truck with air bags and bucket seats?</p><p>A) 0.34.</p><p>B) 0.16.</p><p>C) 0.28.</p><p>D) 0.57.</p>
http://conceptsnclarity.com/question/222/probability-quant-cfa-frmSun, 16 Dec 2018 01:49:18 +0000zero coupon bonds , Dirty and Clean price
http://conceptsnclarity.com/question/89/coupon-bonds-dirty-clean-price
<p>Next few questions are based on given information:</p><p>Given four set of bonds, durations and maturities<br>BOND 1: Fixed rate Treasure Bond<br>BOND 2: Zero-Coupon Corporate bonds mature at 5 yrs and 7 yrs<br>BOND 3: Fixed rate Mortgage Passthrough<br>BOND 4: Fixed rate Corporate bonds mature at 7 yrs</p><p>A Liability with duration 5.8 mature at 5 yrs and 7 yrs, there are no internl cash flows.</p><p><span style="font-size:14px"><strong>Q1.</strong></span> Which bond has contingent risk</p><p>A. 2 , 3 and 4. as all there bond can default. B only 3 C 3 and 4</p><p></p><p><strong>Q2. </strong>. Which of bond will be best to fund the liability?</p><p><strong>A. 1 B 2 C 3 D 4</strong></p><p><strong>Q3. </strong>Which of risk will Mortgage Passthrough have when interest rate decline?</p><p>A. negative convexity B. credit risk <strong>C </strong>market Risk D. Extension Risk.</p><p><strong>Q4.</strong> Suppose a bond’s quoted price is 105 7/32 and the accrued interest is $23.54. If the bond has a par value of $1,000, what is the bond’s flat price?</p><p>A) $1,000.00. B) $1,023.54. C) $1,075.73. D) $1,052.19.</p><p><strong>Q5. </strong>The dirty, or full, price of a bond:</p><p>A) applies if an issuer has defaulted. <br> <br>B) is paid when a security trades ex-coupon. <br> <br>C) equals the present value of all cash flows, plus accrued interest. <br> <br>D) is usually less than the clean price.</p><p><strong>Q6. </strong>An investor has a 1-year, 10% semiannual coupon bond with a price of $975. if the 6-month Treasury bill(T-bill) has a holding period yield of 6%, what is the 1-year theoretical spot rate on a bond equivalent basis?</p><p>A.. 6.4% B. 8.7% C. 9,9% D. 12.8%</p><p>NB: the nominal rate attached with compounding Annually is called EAR and nominal rate with Compounding Semi annually is called BEY.</p><p><br> </p>
http://conceptsnclarity.com/question/89/coupon-bonds-dirty-clean-priceFri, 27 Oct 2017 16:28:01 +0000Marginal Mortality Probability
http://conceptsnclarity.com/question/88/marginal-mortality-probability
<p><img alt="" src="http://bbs.frmspace.com/attachments/dvbbs/2009-6/200961314513319770.gif"></p><p>Calculate the marginal mortality rate in year 3 for the above class of issuers.</p><p>A. 3.45%</p><p>B. 6.38%</p><p>C. 6.40%</p><p>D. 8.89%</p>
http://conceptsnclarity.com/question/88/marginal-mortality-probabilityThu, 26 Oct 2017 18:41:45 +0000As the newly appointed head of operational risk for a large international bank,
http://conceptsnclarity.com/question/78/newly-appointed-operational-risk-large-international-bank
As the newly appointed head of operational risk for a large international bank, you must evaluate the company's current approach to estimating the firm-wide operational loss distribution. The bank's current approach is a bottoms-up process in which for each trading desk the operational loss severity distribution is estimated by fitting historical loss magnitude data to a Weibull distribution and the operational loss frequency distribution is estimated by fitting historical loss timing data to a Poisson distribution. Each trading desk's operational loss distribution is then estimated by aggregating the frequency and severity distributions using convolution. Finally, the firm-wide operational loss distribution is estimated using a copula function generated through Monte Carlo simulation. In evaluating this process, which of the following assumptions implied by the current approach will require further investigation?<br />
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I. The independence of operational loss events of each particular trading desk.<br />
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II. The independence of the frequency of operational loss events and the severity of operational loss events of each particular trading desk.<br />
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III. The independence of operational loss events between trading desks.<br />
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IV. The reliability and sufficiency of historical loss data for each trading desk.<br />
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A. I, II, III and IV<br />
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B. I, II and IV<br />
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C. II, III and IV<br />
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D. I and IIIhttp://conceptsnclarity.com/question/78/newly-appointed-operational-risk-large-international-bankFri, 15 Sep 2017 16:53:10 +0000FRM P2 - operational risk
http://conceptsnclarity.com/question/77/frm-p2-operational-risk
<p><a target="_blank" rel="nofollow" href="http://wheretoobuy.com/instant-clear-cream/"><strong><em> </em></strong></a>As the inexperienced global head of operational risk for DEF Financial Services, you are trying to make a decision about how to quantify your firm's operational risk exposure. You've decided the best combination of methodologies to use would be factor-based models and the capital asset pricing model. Now, 6 months after you've implemented your approach you've identified some major limitations in your decision on the methodologies to use. Which of the following best describes those limitations?</p><p>I. You are unable to reliably predict an operational risk event on a detailed level.</p><p>II. Collecting and aggregating consistent data across the firm is challenging.</p><p>III. You are unable to capture interdependencies between areas of your firm.</p><p>IV. You are unable to reliably forecast general trends in operational risk events.</p><p>A. I and III</p><p>B. II and IV</p><p>C. I, II and III</p><p>D. II, III and IV</p><p></p><p></p>
http://conceptsnclarity.com/question/77/frm-p2-operational-riskThu, 14 Sep 2017 18:07:58 +0000FRM P2 - Basel operational risk
http://conceptsnclarity.com/question/76/frm-p2-basel-operational-risk
According to the Basel Committee which of the options below is NOT a qualitative standard that a bank must meet before it is permitted to use the Advanced Measurement Approach (AMA) for operational risk capital:<br />
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A. Internal and/or external regulators must perform regular reviews of the operational risk management processes and measurement systems. This review must include both the activities of the business units and of the independent operational risk function<br />
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B. There must be regular reporting of operational risk exposures and loss experiences to business unit management, senior management and to the board of directors<br />
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C. The bank's internal operational risk measurement system should not be integrated into the day-to-day risk management processes of the bank but should provide a general overview of the operational risks involved in the processes and operations<br />
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D. The bank must have an independent operational risk management function that is responsible for the design and implementation of the bank's operational risk framework.http://conceptsnclarity.com/question/76/frm-p2-basel-operational-riskWed, 13 Sep 2017 18:45:49 +0000FRM P2 - Weakness of Top-down Approach
http://conceptsnclarity.com/question/75/frm-p2-weakness-top-approach
<p>Which of the following is a weakness of the top-down approach to measuring operational risk?</p><p>A. It fails to consider historical information</p><p>B. You cannot use earnings volatility as an indicator of risk potential in this approach</p><p>C. Information on specific sources of risk is not provided</p><p>D. It is based on the specific mapping of business units, and not the overall organization</p><hr>
http://conceptsnclarity.com/question/75/frm-p2-weakness-top-approachFri, 08 Sep 2017 12:02:08 +0000Expected value? Expected time
http://conceptsnclarity.com/question/11/expected-expected-time
You are trapped in a dark cave with three indistinguishable exits on the walls. One of the exits takes<br />
<br />
you 3 hours to travel and takes you outside. One of the other exits takes 1 hour to travel and the other<br />
<br />
takes 2 hours, but both drop you back in the original cave. You have no way of marking which exits<br />
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you have attempted. What is the expected time it takes for you to get outside?http://conceptsnclarity.com/question/11/expected-expected-timeSun, 22 Jan 2017 19:57:16 +0000Effective Duration
http://conceptsnclarity.com/question/5/effective-duration
http://conceptsnclarity.com/question/5/effective-durationSat, 12 Dec 2015 07:17:43 +0000A bell-shaped, symmetrical frequency distribution has a mean of 10.
http://conceptsnclarity.com/question/1/bell-shaped-symmetrical-frequency-distribution-10
A bell-shaped, symmetrical frequency distribution has a mean of 10. If 16% of the observations in the distribution are negative, what is the coefficient of variation of X?http://conceptsnclarity.com/question/1/bell-shaped-symmetrical-frequency-distribution-10Thu, 10 Dec 2015 22:47:59 +0000