Couple Questions from Schweser Exam 2

would appreciate anyones feedback… (12.2) missapropriated info vs. inside information. I had put the violation was due to missapropriation of info. Seemed similar to questions last year where the answer was missapropriation. (12.3)If a person sits on the board of a company and also performs part time consulting work for the same company, would this not render that person as a “non independent” (12.4) Company has to take a double hit on the interest?? (ie. credit interest to those who should have been paid. At same time, interest that was paid in error cannot be recouped??) (14.1) Wtf is Jump to default??? (14.2) in court of law, how can you file claims for PV of future risk? You’d think once a company goes bankrupt it would be based on liabilitiesowing at the time. How can file a claim for a potential liability?

Jump to default is just another way of saying Current credit risk.

12.2 – that question pissed me off too. I guess their definition of “misappropriation” is when you deliberately try to get inside info, instead of just stumbling upon it by accident when you’re taking a sh!t and overhear someone in the next stall. That’s the only reasonable explanation I can think of, otherwise it’s stupidly worded.

. I stand corrected!

You can be classified as independent as long as you are not an executive.

No, Good Guy is correct. The cross default is when issuer defaults on one they default on all debts.

I know because I got it wrong.

comp sci…i’m in corporate banking and i’ve never heard “jump to default” before. Thanks for definition…so basically the same thing as “cross default” then. farley - agree completely. Last year they threw those same scenarios at us and the answer was missapropriation. ahh well…i’ll have to remember that one.

jmychasi Wrote: ------------------------------------------------------- > comp sci…i’m in corporate banking and i’ve > never heard “jump to default” before. Thanks for > definition…so basically the same thing as > “cross default” then. > > farley - agree completely. Last year they threw > those same scenarios at us and the answer was > missapropriation. ahh well…i’ll have to > remember that one. Sorry, i corrected myself. Was under full impression it is what jump to default is! Talking about Process vs Outcome! probably got this one correct and let it slide! http://www.creditflux.com/glossary/jump+to+default+risk.htm This is jump to default

jmychasi – see my response above. Jump to default is NOT the same as a cross default.

ahhhhhhhh! thanks guys… here i was getting all excited to go back to work and start throwing out “jump to default” bombs on everyone. Maybe i still will.

12.2 was funkin bs. That was mosaic if I ever saw it. That was not consistent with any Schweser or CFA practice/ actual I have ever seen.

I’m with you on 12.4. If the bank retroactively allocates shares to an account, why shouldn’t it reverse the interest on the cash used to buy them?

sickel2 Wrote: ------------------------------------------------------- > 12.2 was funkin bs. That was mosaic if I ever saw > it. That was not consistent with any Schweser or > CFA practice/ actual I have ever seen. They had just developed a fuel cell thing that no one before had managed. That is material. It was also non-public. For once it seems clear cut to me, but then that’s ethics