标题: Thoughts on this year's mock [打印本页] 作者: pawn 时间: 2011-7-13 13:29 标题: Thoughts on this year's mock
Took the Mock Exam today--didn't think it was too bad although a few tricky questions. Scored a 73.33 (44/60) but made a couple of really dumb mistakes including circling the correct answer and bubbling in the wrong answer in one instance. Honestly, I would be content if this was the difficulty level of the actual exam. I expected worse. What were everyone else's thoughts?
Additionally, two quick questions on this exam.
19. I was able to get the price weighted index % change, but is there a way to calculate the equal weighted index % change to confirm it is less?
49. Why is the answer a binary credit option and not a credit spread option? I know in the text it says that a binary credit option prevents downgrade risk, but I thought that the two were identical--just one was on the price and one on the rate.作者: Darien 时间: 2011-7-13 13:29
19. I asked this question earlier. The consensus was to take an equal weight in the change in price as opposed to the change in mkt value.作者: lcai 时间: 2011-7-13 13:29
Don't argue with me regarding these answers. You have a tendency to do that. ;)作者: skycfa 时间: 2011-7-13 13:29
Downgrade risk can be hedged via credit options (Schweser Book 3 page 102).
There are two types of credit options. If based on price, then it is a binary credit option. If based on yield, it is a credit spread option. (Schweser Book 3 page 84).
Thus, to me, binary credit options and credit spread options should both work.作者: aidebaobao 时间: 2011-7-13 13:29
Both should work, but I believe the mock mentioned she was looking to hedge a specific event (crossing over from investment grade to below investment grade).作者: pennyless 时间: 2011-7-13 13:29
Binary credit options pay on a specific thing. i.e. Credit down yes/no. 1/0作者: bodhisattva 时间: 2011-7-13 13:29
so how does that give it away that it is binary?作者: Windjam 时间: 2011-7-13 13:29
Required reading, glossary, binary credit option "options that provide payoffs contingent on the occurrence of a specified negative credit event."
