2008 Exam 8

[chic squirrel]

I plan to start early for this one-my last exam, hopefully- 'cos I have an infant to care for.

Please advise on the following:

1. Is is better to start with BKM or with Hull.(I've done both in my MBA and Hull is the worst.)
2. What study manual would you recommend-I think I read somewhere that Goldfarb's manual was good.Ofcourse, I'll have to use the one for the 2007 sitting for now.
3. I know this stuff is tough-esp Hull.Would you study for this one any differently as compared to the others?

Thanks

[Cracktuary]

1) Definitely do BKM first. It presents a better financial foundation than Hull, which just jumps into derivates NTTAWWT.
If you've already seen both in your MBA, then you're in a better position than most. I'd still go for BKM first, since you've probably forgotten / glossed over some of the elementary stuff there.

2) Goldfarb's manual was great! It's about half the size of other comparable manuals, but it definitely covers everything that you could possibly need. One note is that you need to use it as a supplement to the readings. He states this at the beginning, and he doesn't regurgitate every detail, but all the important and/or difficult sections are highlighted and often presented in a different manner than BKM / Hull, which helps aid the final understanding.

3) Don't think so. As usual, read with an eye towards what kind of questions they might ask. You'll need to do more practice problems than the other upper level's, since it's almost all math related. Some people say that you should focus on questions in the chapters of the books. Goldfarb gives a recommended question list at the end of each chapter.

Hope all that helps...good luck with the studying, AND the rugrat!

[chic squirrel]

thanks Cracktuary-that helps!

[CantThinkOfaBetterNick]

I completely agree with Cracktuary... just a couple of things I want to emphasize a little more on.

As cracktuary said, Goldfarb's manuals are to be used as a supplement to the reading material. From the previous exams, I was used to All-10 which covers everything... Goldfarb does not. While Goldfarb does a great job of explaining the important concepts, you will need to go through the texts pretty thoroughly.

As for practice problems, I didn't do many from the texts, but I think there were a few questions on the exam that were very similar to either a problem from the texts or an example. I'd try and make sure you get all those in (not just Goldfarb recommended ones)

[asilem]

I would also recommend spending a fair amount of time on the articles on the syllabus - if I didn't pass this time around it will be because I spent too much time focusing on the Hull and BKM texts.

[chic squirrel]

I completely agree with Cracktuary... just a couple of things I want to emphasize a little more on.

As cracktuary said, Goldfarb's manuals are to be used as a supplement to the reading material. From the previous exams, I was used to All-10 which covers everything... Goldfarb does not. While Goldfarb does a great job of explaining the important concepts, you will need to go through the texts pretty thoroughly.

As for practice problems, I didn't do many from the texts, but I think there were a few questions on the exam that were very similar to either a problem from the texts or an example. I'd try and make sure you get all those in (not just Goldfarb recommended ones)

Thanks for the advice. I have been an All10 girl myself but I guess manuals aren;t going to be enough for this one. This is my last exam and I really want this over next year!

I was going to ask whether buying the solutions manual is worth it -I can probably skip it if past and practice questions in the manuals are going to be adequate.

[great3981]

Anyone have the All 10 reading order from 2007?

[Utopial]

ignoring seminars (i cant goto them), is goldfarb still better than all10? are his notes comprehensive or do u NEED to also read the actual papers? i found that for other exams like 5, 6, etc that all10 was all i needed.

what about all10? im not really too keen on having to read long papers if they can be easily summarised the way all10 has done in the past. i have a copy of the 2006 goldfarb. maybe i should get all10 as well since it is usually comprehensive, and just refer to goldfarb or the paper itself if i struggle with a concept.

[Harbinger]

I think I may get both Goldfarb's manual and All10. I'm so use to All10 for taking notes that I don't want to change it up.

[Didon]

Anyone have the All 10 reading order from 2007?:bump:

Or any suggested order at all? This material is going to be really tough for me, so I need to start soon. Books before articles? BKM before Hull? :-?

[Da Bears!]

:bump:

Or any suggested order at all? This material is going to be really tough for me, so I need to start soon. Books before articles? BKM before Hull? :-?

I'm going to start with BKM and then jump into Hull. I've had classes with both texts before, and BKM was definitely the more user friendly IMO. Hull was a lot more technically written it seemed.

After that I'll start jumping into the papers, because the only thing I hate more than reading papers is writing them.

[Cracktuary]

Definitely do BKM before Hull.

I did most of the papers at the end, but I did mix a few in there as well.

The order in which I did the papers (if you're interested) was:

1) Altman – Measuring Corporate Bond Mortality and Performance
2) Black – How to Use the Holes in Black-Scholes
3) Fabozzi – The Handbook of Fixed Income Securities
4) Noris – Asset/Liability Management Strategies for P & C Companies
5) Feldblum – Asset Liability Matching for P & C Insurers
6) Panning – Managing Interest Rate Risk: ALM, Franchise Value, and Strategy
7) Stulz – Rethinking Risk Management
8) Miller, Culp, & Neves – Value at Risk: Uses and Abuses
9) Butsic – Solvency Measurement for Property-Liability Risk-Based Capital Applications
10) Cummins – Allocation of Capital in the Insurance Industry
11) Goldfarb – Risk Adjusted Performance Measurement for P & C Insurers
12) Gorvett – Insurance Securitization: The Development of a New Asset Class
13) Goldfarb – P & C Insurance Company Valuation

[MountainHawk]

All along the exam process, I was told 'man, the best exam is the investment exam, there is so much interesting stuff on it.'

I say to all those people: "You lied!"

Can't bring myself to start this sucker until January. Hopefully, I'll have the motivation of knowing it could be the last exam I need to take.

[Harbinger]

Can't bring myself to start this sucker until January.

I think you'll be ok, the exam isn't until May 12, 2008. 3 weeks later than this previous year. The last couple of years I've started studying for my spring exam shortly after Thanksgiving but this year I will NOT start until after Christmas.

http://www.casact.org/admissions/syllabus/schedule.pdf

[GreenPea]

I plan to start early for this one-my last exam, hopefully- 'cos I have an infant to care for.

Please advise on the following:

1. Is is better to start with BKM or with Hull.(I've done both in my MBA and Hull is the worst.)

Thanks
BKM covers traditional investment topics like portfolio management, EEH, CAPM, term structure, .... I'll say these are old school stuffs.

Hull deals with the valuation of financial derivatives. In order to fully understand the materials (not necessary to exam 8) , it requires some knowledge of stochastic calculus and diffusion processes. It has very little to do with finance and economics so that is why the materials are pretty dry.

Therefore it does not really matter which book to start first.

[CantThinkOfaBetterNick]

I was going to ask whether buying the solutions manual is worth it -I can probably skip it if past and practice questions in the manuals are going to be adequate.

I got a 5 last time... in 2008, the only thing I plan to do different is buy the solutions manuals for BKM and Hull.

My advice: get the manuals...

[laurisssa]

I got a 5 last time... in 2008, the only thing I plan to do different is buy the solutions manuals for BKM and Hull.

My advice: get the manuals...

I think this answers a question I was going to post regarding if I should be doing the end of chapter questions. I wasn't sure how exam relevant they are.

[Wesley_Willis]

One of the questions from last year's exam (something about long forwards in silver) was based directly on a chapter-end problem from Hull. So, caveat omittor.

[much ado about nothing]

only one? doing hundreds of problems to hopefully stumble upon the one problem that is ultimately similar to an exam problem - is there a more effective way of studying this material?

[Wesley_Willis]

Well, I admit I wasn't clear, but I didn't say _only_ one. Probably every Hull question on the exam has an analogue in the chapter-end problems.

The one I brought up was a type of question that hadn't been asked recently and which you'd likely struggle with on the exam if you hadn't seen it before.

That said, I believe Goldfarb's notes had a similar problem. You can probably get away with skipping the problems in the book, but I guess it depends on how confident you want to be on exam day.

If I had to take it again, I'd buy Goldfarb's notes but skip the seminar

[great3981]

Anyone have a recommendation on All10 vs Goldfarb if you can only get one (on the house, that is)?

[3tac]

Definitely Goldfarb!

[econfkw]

GreenPea always makes very fair comments. I didn't take the exam 8 yet, but I know both BKW and hull books pretty well. BKW has more to do with financial economics, like CAPM, no arbitrage theory.... Hull is like a math finance book, mostly related to derivative pricing. They are very different things. It really doesn't matter which book to start with. I would only say BKW is more explanatory, less math. Since you are MBA student, you might try BKW first.