I agree saurya_s. In addition, I don’t understand half the questions in Book 7! I swear, it literally feels like I have no idea what I’m doing. With less than one week left, it’s soooo demoralizing!!!
bayes is better once you memorize all the prob foormulae and know what they want also, FRAs tend be ok as long as you can separate the inputs FRA = notional * (fl - fw (d/360) / ( 1 + fl(d/360)
Margins and probability, they are killing me b/c they are so simple.
options…skipping that crap, ill make up for it somewhere else…i hope
Probability - Comprehending the problems is a b!tch for me. Bond forward rate and spot rate calcs - I’m hit or miss. In general, any calculation problem where I can’t figure out the operation right off the top of my head is getting skipped or I’m making an educated guess. I’m banking on this sucker being more conceptual than technical.
Skipping FSA 
I hate this one. Worst topic in the world. Most stupid. Deserves to be burned.
Is it not the same for equities?
The way I do margin calls for a stock is:
(Buy price * 1-initial)/(1-maintenance) so with a $10 stock, 50% initial, and 30% maintenance:
($10 * .5)/(.7) = $7.14
Futures just uses a cash balance and the main difference between them is that with stocks you only have to get back up to the maintenance but with futures you have to get back to the initial.
Bayes’ Theorem is easy. Anything involving the add-on rate/DR Rate, I’m taking a calculated guess. Also the binomial pricing model - don’t know much on that. Economics - any complicated calculations. Any calculations on equality/difference on means/variance.
Economics is the most difficult for me, especially the questions related to the impact of one variable on the far far far the second variable. Kind of a butterfly effect for me 
Here are a couple hints:
- To remember Bayes theorem,
A) Remember that P(AB) = P(A) x P(B|A) = P(B) x P(A|B)
then take the last two terms: P(A) x P(B|A) = P(B) x P(A|B) and divide both sides by P(A)
you get P(B|A) = P(A|B) x P(B)/P(A)
- For Spot and Forward Rates: remember that in equilibrium, you make the same total gains whether you invest at the long spot or the short spot followed by the forward. Then just solve for the missing piece:
Example: the 5 year spot is 10% and the 3 year spot is 9%. Find the 2 year fwd in 3 years:
Option 1: Invest $1 for 5 years at 10%: $1 becomes $1.6105 in 5 years
Option 2 : Invest $1 for 3 years at 9%: $1 becomes $1.295 in 3 years.
Then solve what rate turns $1.295 into $1.6105 in 2 years ==> the answer is 11.52%
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This is a great idea! How do you know that 1.295 is PV and 1.6105 is FV?
Because you want to determine the rate that turns 1.295 into 1.6105 over two year’s time…
Silly mistake on my part, thanks!
I admit, that’s cool. The simple approximation method is equally easy (for me). The answer is usually just a few basis points off.
Aye, Bayes is easier than cash flow. Diluted EPS seems difficult than it is. So is probability. I gave FRA 1 month and studied cash flow for most of it. End the end, I gave up on cash flow… 