Formulas for beta and covariance are suckling my blood.

CFA Level III
#1

Any tips on remembering them? Thanks.

#2

#youhavea33%chancetoguesscorrectly

#wouldntbeAMquestion

#3

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.

#4

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!@!@!@

#5

^^EAR in the AM would be incredible

#6

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

#7

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

#8

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 -_-

#9

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

#10

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.

#11

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