I currently have the Kaplan Schweser FRM study material + Philippe Jorion FRM handbook. Can you please suggest other study material that will be helpful. The FRM handbook seems pretty tough. Also, if I score in the 1st quartile around 75% would that be enough to clear the Part I exam or I would need a better score to clear? Please suggest…

You worry too much. Stick with Schweser.

Are Schweser practice questions enough? Just he ones included in the books themselves and that finals book?

Hey @former trader the schweser book don’t have a lot of practice ques that’s the concern I had.

Ok. Schweser is good to condense the material.

For part 1 2014, schweser’s online qbank has a total of 1024 questions if i remember correctly.

Hi,

Do you have soft copy of this question bank. Could you please share.

Regards,

Guys, I have just started reading Kaplan’s book 4. Does anyone else think the same way as I do? I think Kaplan’s book has too many errors.

For example, in the chapter about calculating VaR, it sometimes says the 5th percentile of 100 sample is the last and second last worst results and sometimes says the 5th lies in the 5th and 6th and sometiems says it lies in the 5th and 4th. It is so conflicting.

^ replying to the post above.

I think you are refering to the page 45 (topic 38: Allen Chap 2). Please look at the hybrid cumulative weight instead of assuming all returns have equal weight .The worst return has the weight of .0391 and the second worst return has the weight of .0346 so the 5% percentile lies between these two return.

In case of the errors, please go to Schweser website and take a look at the erratas section.

Hope it helps!

^ Reply to the prevous post

Thanks

Ok let me explain how the hybrid approach works.

The first step: Rank all the observation from worst to best.

The second step: Calculate the weight of each return starting from the worst return. Using this example, the worst return, -4.7%, is 2 period old so the weight = (1-0.96/1-0.96^100)*0.96 = 0.0391 assuming that the lamda is 0.96 (given in the question and there are altogether 100 observation so n=100). So, the worst return has the weight of 3.91% instead of just 1% weight if we are using historical approach which assumes all the returns have the same weight.

The third step: Repeat step 2 until the CUMULATIVE weight reaches the 5% percentile (because the worst return has the weight of only 3.91%). In this case, the first and the second lowest returns have the total cumulative weight of 7.36%. But we just want 5% cumulative weight here.

The fourth step: Use linear interpolation to get the exact return that associated with the 5% percentile.

In my opinion, the book does the good job in explaining the procedure

Sorry… didn’t see you just edited your post, but it may be useful to others.

Hi man, thank you very much for your post.

Ya, I realised how I should interpret the calculation methodoly before I deleted the question. I didn’t purchase the text books so not sure if the text books explain things more clearly but at least notes are not too clear.