In five short weeks...

[ebony]

Still plenty of time because no one has mentioned the PA_ word yet, but...

We will ALL be ready for this exam and ACE it even if we had to take it using low battery calculators, blunt #2 pencils, and had to stand on our heads with one hand tied behind our back.

Look out spring MFE, here we come!!!!

:guitar:

[BadBeatMe]

Don't remind us that we're so close.

I take it as a good sign that I no longer need to use the COB thing to remember the difference between a call and a put.

[Hugh Jass]

Good luck ebony!

and everyone else, too

[colby2152]

Don't remind us that we're so close.

I take it as a good sign that I no longer need to use the COB thing to remember the difference between a call and a put.

What the heck is the "COB thing"?

[BadBeatMe]

What the heck is the "COB thing"?

It's a memory trick for remembering the difference between a call and a put. Call Option to Buy. The one for puts it POS, Put Option to Sell.

There's also one I developed for exotic options, WTFIT, WTF Is That?

[colby2152]

What P word are you talking about??

I'm SO worried about this exam. Some people told me they didn't think I could pass. What a blow to my self-esteem or what's left of it now. :(

Don't listen to others... just hit the books and practice, practice, practice...

[Nonpareil]

Don't listen to others... just hit the books and practice, practice, practice...

:iatp:

This is an exam it is easy to be nervous about, since it's hard to know what to expect. One good gauge is how you are doing on ASM practice exams under exam-like conditions. You should do better on the real exam than those practice exams. If you can average 12-13 right on those you should pass the actual exam by a comfortable margin. I did significantly better on the actual exam than my average score on ASM exams, I likely got four more right on the actual exam than my average score on the ASM practice tests.

Something I found helpful in preparing for this exam was to write out little scripts for certain types of problems, and then practice working those until I could do them in 3-4 minutes. A prime example is estimating stock volatility - if you know how to work that kind of problem, you should be able to do it pretty quickly, giving you more time to work trickier problems. Foreign exchange options aren't all that bad either, but they can be tricky if you don't know how to approach them. You will probably see at least one of those on the exam, maybe even two or three, so if you've practiced setting up and working that kind of problem, you should do OK on that. Ito's Lemma, some of the bond problems, exchange options, calculating prices for Asian options, are all pretty straightforward and don't take that much time if you are prepared for them.

Time is key on this exam because it's so short. Two hours can go by pretty quickly if you get stuck on one or two problems. Working on your speed helps a lot, as does skipping problems you don't immediately see how to proceed once you read them. Work the easier problems first, and build up your confidence, and then tackle the harder problems. Don't let one problem make you flunk this exam - you only need to get about 60% correct to pass. Worst case - know the basics really well, do a quick read through of all the problems and identify 12 or 13 problems you know you can do, make sure you do those correctly, and you'll pass this sucker. There will probably be some problems that come out of left field on this exam, but don't worry about that, there should be enough straightforward problems on the test that you can pass if you focus on them. Don't worry so much about the unusual problems that everyone complains about.

[colby2152]

I see your :iatp: and raise you an :iatp:

[donny5k]

I see your :iatp: and raise you an :iatp:

No string raises please.

[GooseyGoose]

No string raises please.

haha

[colby2152]

Okay, I just took ASM exam #8, and I scored a 12/20. That's not too bad considering...

I made a dumb mistake on one of the problems (not considering dividend yield and risk-free rate in option convexity, the 1st problem out of the gate)

Two problems were simply weak points that I need to practice more on: currency exchange rate and forward-start options

Two problems were incredibly tough as they involved long formulas from Chapter 17.

Six problems were unanswered by the time I had two minutes left. Two of these were the problems just mentioned. I scored 1/6 on my guesses, and the one I guessed right on was problem #6. This problem threw me for the loop as the dividend yield as not given which led me to a guessing game for nearly 10 minutes. I eventually gave up on it and guessed correctly. Naturally, of course I see that this is in the errata, so I would have scored correctly on this one with the right information.

I spent a great deal of time on problem #14. I estimate that I spent 20 minutes on this problem. It is best judgment to skip a problem that you may perceive as difficult. However, I viewed this problem as easy, and I knew how to solve it. However, I kept on making mistakes with a decimal place in the ln(S/K) component of 1_1 and the negative signs. What should I do in this case next time? I eventually got this problem right. Should I bail out on a problem after six minutes, so that I can devote more time to problems that I may miss out on (like the last three of this exam for me)... or do I continue on with it as I know I can score this easy problem? The tough thing is finding where I went wrong. Re-doing a problem could take anywhere between 3-6 minutes. Trying to spot an error could take a half minute if you were spot-on. However, if you were like me in this problem, and it took you a great deal of time to find out where you went wrong, it could take an additional 10 minutes or so.

Maybe the lesson I should learn is to completely redo a problem and make sure I write neatly and organized so that I avoid the mistake (and consequently avoid wasting time)?

[ebony]

What P word are you talking about??

I'm SO worried about this exam. Some people told me they didn't think I could pass. What a blow to my self-esteem or what's left of it now. :(

That's total BS. Good motivation. Prove those mf-ers wrong!

[ebony]

Maybe the lesson I should learn is to completely redo a problem and make sure I write neatly and organized so that I avoid the mistake (and consequently avoid wasting time)?

Read my mind colby. I was just thinking this this morning. On the 2 hours exams you must avoid solving a problem you know how to do twice because you made a stupid error.

[Nonpareil]

I spent a great deal of time on problem #14. I estimate that I spent 20 minutes on this problem. It is best judgment to skip a problem that you may perceive as difficult. However, I viewed this problem as easy, and I knew how to solve it. However, I kept on making mistakes with a decimal place in the ln(S/K) component of 1_1 and the negative signs. What should I do in this case next time? I eventually got this problem right. Should I bail out on a problem after six minutes, so that I can devote more time to problems that I may miss out on (like the last three of this exam for me)... or do I continue on with it as I know I can score this easy problem? The tough thing is finding where I went wrong. Re-doing a problem could take anywhere between 3-6 minutes. Trying to spot an error could take a half minute if you were spot-on. However, if you were like me in this problem, and it took you a great deal of time to find out where you went wrong, it could take an additional 10 minutes or so.



Whenever I get stuck like that, I immediately quit the problem and move on. I then go back after I've worked "easier" problems. "Easier" varies from day to day and person to person, as I've gotten stuck on "easy" problems before too, but you just have to learn to move on. MFE is a two-hour test, so you have very little cushion. On longer tests it's easier to make up time if you can hit 5-6 problems in a row, zooming through them quickly, but not so much with a two-hour exam. At least it seemed that way when taking the ASM practice tests, which were a good bit harder than the real thing.