Formulas for beta and covariance are suckling my blood.

Any tips on remembering them? Thanks.



What about a derivative question like calculating the effective annual rate for an interest rate call/put option, or finding bond equivalent yield?

My biggest nightmare if they show up in AM.

Haha I’ll be thinking of you if we get one because that’s actually one of my hopes. I’d bloody love a 10 mark EAR AM question. Just don’t give me factor covariance matrix!@!@!@

^^EAR in the AM would be incredible

Remember below. It should be able to derive others.

Beta = cov (i,m) / variance (m) = cov (i,m) / st dev (m)^2 Correlation (i,m) = cov (i,m)/ st dev i * st dev m

Thank you this is really good. Should be able to derive almost everything from these two.

Implementation short fall and factor covariance questions are my biggest nightmare. EAR you can almost figure out on the fly

Oh and anything related to currency management -_-

some of the currency questions are difficult, but i got a feeling one of those will pop up this year…

Galli - I hate anything related to currency management - unfortunately I think it will be on the test, probably pretty big, just have a bad feeling about it.

FX Forward valuation and calcuate credit risk is not easy to be done within 3 mins…