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Re: Odds of passing FRM with 7 days of studying
Author: mustill 
Date:   Tuesday, November 16 @ 8:07 pm

Hi folks!

This is summarized from some of the questions posted by Student and
other fellow 2003 candidates on the FRM 2003 exam. I do not warrant
the accuracy of these questions as posted. Maybe those who passed 2003
exam may want to provide some inputs?

(a) Which option is very interest path dependent?
Candidates speculated between barrier and binary option.

(b) Which option has an unlimited upside?
Candidates guessed Asian option.

(c) Is it appropriate to sell deep in the money put option?

(d) Geometric Brownian Motion. Which is normally and lognormally
(i) S
(ii) ds
(iii) ds/s

(e) If you have a stock and options position with delta neutral and
positive gamma, how do you hedge it?

(f) Company A with netting agreement with Company B. A owes B $1m
after netting. Without netting agreement with Company B, B owes A
$10m. What is A's exposure to B?

(g) Candidates said there is a question on calculating tracking

(h) A company files for bankruptcy. Which bonds trade at higher
price? Bond with higher or lower coupon? Assuming duration is not the
same but same seniority and term. I

(i) Which bond has a "reasonably strong ability" to pay?
The 2 main choices are AA and A.

(j) Say a fund is managed by 2 person only. Which of the following
matter most? Assuming no asset.
(i) Asset under management
(ii) Risk control/ system reporting system
(iii) Investment style

(k) Which of the following is not a derivative?
(i) CBOE weather derivative
(ii) REITS

(l) Firm A has economic capital in addition to regulatory capital
while firm B does not have economic capital. Is A as good as B?

(m) I think there is a question posted by candidates on a Price yield
curve for a callable
bond asking candidate to mark out where convexity is 0.

(n) There is a question asking candidates on SPAN ( Std Portfolio
Analysis Network)?

(o) Which one has more time value premium?
(i)ATM call
(ii) Out of the money call
(iii) ITM call

(p) If Y=ln(x). If Y is normally distributed with mean of 0, what is
the mean of X?

I guess if most of you can answer the above questions, I am sure you
would have no problem this Saturday.

All the best. Remember to have a break after the exam. I am sure most
of you are fellow CFA candidates who are in Level 3 or had just passed
the Level 3 exam. All of you deserve a break after 2 major exams in a

Christmas is coming. HAve fun!

From analystforum.

See also CFA mastery.

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