Just curious to get other people’s thoughts on this workbook of questions. while some questions are nice, I find a lot of them to be utterly ridiculous nitpicking nonsense.
example:
True or False: At any point in the life of a forward contract, the PV of the contract represents the current credit risk to the party with the positive market value.
Answer: False. It represents *potential* credit risk. Not *current* credit.
There are so many in here that are just gotcha-word-choice, rather than actual learning material.
True or False: Liquidity is a source of market risk and settlement risk is a souce of nonfinancial risk.
False: Liquidity is a source of financial risk, not market risk.
how ridiculous can you be? lol… transacting in any market place, liquidity is a risk, whether its buying/selling homes or shares of Intel. They need some editors over at Schweser to look at this stuff before they put it out.
I agree with you that there is something make me confuse…However, it is what CFAI say also.
page 272 reading 34:
Financial risk include: market risk, credit risk and liquidity risk. Market risk is risk related to interest rates, exchange rates, stock price and commodities prices.
I think it is their definition that we have to follow…