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#101
08-10-2012, 08:56 PM
 Math Member Join Date: Jan 2011 Posts: 294

Had another thought. What did people think about the theory question regarding puts, calls, time to expiry, and price? Answers were I, II, etc.
#102
08-12-2012, 01:06 AM
 mred Member SOA Join Date: Sep 2009 Location: WI Studying for C Posts: 34

Quote:
 Originally Posted by Gandalf I could see where knowing someone's answers on a pencil-and-paper test could help someone else in a different time zone. For a computer-based test, why would it matter if you knew what letter you chose for question 1, or even for questions 1-30?
You could store actual answers (not just ABCDE) and give them to somebody. If they memorized those numbers, it might be a slight advantage for them.

I'd think they could gain a greater advantage spending that time memorizing something legitimate, like formulas.
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P FM MFE MLC C
Econ Fin Stat
#103
08-13-2012, 10:38 AM
 Sma4186 SOA Join Date: Aug 2012 Posts: 9

Quote:
 Originally Posted by Math Had another thought. What did people think about the theory question regarding puts, calls, time to expiry, and price? Answers were I, II, etc.
Is this the one where you're told that a put option is sold and asked what will happen if a call option is also sold?
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P. FM. MFE (Pending). MLC. C
#104
08-13-2012, 10:38 AM
 Sma4186 SOA Join Date: Aug 2012 Posts: 9

Anyone get these two questions?

A question where you're given futures price and other relevant information and asked to find volatility.

Question where you're given the price of a put option and told that early exercise on an American call option is optimal. Then you're given three numbers and asked which ones are possible values for the present value of dividends.
__________________
P. FM. MFE (Pending). MLC. C
#105
08-13-2012, 11:05 AM
 MayanActuary Member SOA Join Date: Jul 2010 Studying for MLC Favorite beer: A&W Root Posts: 893

Quote:
 Originally Posted by Sma4186 Anyone get these two questions? A question where you're given futures price and other relevant information and asked to find volatility. Question where you're given the price of a put option and told that early exercise on an American call option is optimal. Then you're given three numbers and asked which ones are possible values for the present value of dividends.
1- nope.
2- yes, sending pm.
#106
08-13-2012, 01:26 PM
 PKG Member SOA Join Date: Jul 2012 Location: MD Studying for FAP? College: PSU '11 Favorite beer: NOT Natty Boh Posts: 36

Quote:
 Originally Posted by MayanActuary 1- nope. 2- yes, sending pm.
I too had this question and think I figured it out but am not 100%.
#107
08-13-2012, 05:42 PM
 Minyu SOA Join Date: Feb 2012 College: University of Waterloo Posts: 20

Quote:
 Originally Posted by arhong Anyone got the following questions: 1. Given different strike, call and put price, ask for bull or bear? 2. Given yield curve, duration hedge, ask for if yield increase or decrease? (This is the one I could not get a right answer)
2. Is this the one where the yield curve is flat, and the question had something to do with the yield curve increasing/decreasing? If yes, I recall getting an exact answer...
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Last edited by Minyu; 08-13-2012 at 07:18 PM..
#108
08-13-2012, 08:13 PM
 mochishans Member SOA Join Date: Nov 2008 Location: Tokyo, Japan Studying for FAP College: Temple University Posts: 62 Blog Entries: 1

Quote:
 Originally Posted by Sma4186 Anyone get these two questions? A question where you're given futures price and other relevant information and asked to find volatility. Question where you're given the price of a put option and told that early exercise on an American call option is optimal. Then you're given three numbers and asked which ones are possible values for the present value of dividends.
Got these too, could not find answer of either of them.

God I feel like I am going to fail again!
#109
08-20-2012, 05:15 PM
 ThanksTom Member SOA Join Date: Aug 2012 College: Saint Joseph's university Favorite beer: Pliney The Elder Posts: 138

Just returned from my two week bender after MFE! I had the Benz problem as well as the forward tree where you calculate K in a one year tree and find the price of the option in a two year tree. Got an answer which was right in between two of the choices for both.
#110
08-20-2012, 06:24 PM
 LargeNumbers Member SOA Join Date: Nov 2011 Posts: 75

I had the forward option problem and I couldn't get an exact answer for that no matter what I did. I did have that find 'a' to make the function constant. That one was simple but finding the answer took more time than it should've been until I had one of those aha! moments.

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