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Corporate Finance and ERM (CFE) Track Old Exam DP - Design and Pricing

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Old 06-09-2014, 11:29 AM
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Default Corp. Finance/ERM Track + CFA?

I'm debating between either doing the Corporate Finance track or Investments track. I'm leaning towards Corporate Finance because I can then take the CFA exams in lieu of the Investments track. Does this line of reasoning make sense? Is there overlap between Investments track and CFA?
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Old 06-09-2014, 11:36 AM
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Originally Posted by dalev3517 View Post
I'm debating between either doing the Corporate Finance track or Investments track. I'm leaning towards Corporate Finance because I can then take the CFA exams in lieu of the Investments track. Does this line of reasoning make sense? Is there overlap between Investments track and CFA?
There are some overlappings between CFA level 3 and QFI exams (both use the same textbook, Management Investment Portfolio).

There are some overlappings between CFA level 1/2 and CFE exams (both talk about the financial statements and financial ratios).

Please feel free to send me an email to discuss more details. Thanks!
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Last edited by PAK; 06-08-2015 at 10:35 AM..
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Old 08-22-2014, 04:21 AM
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IS CERA +CFA sufficient if you were in a risk management department ? or CFE alone will be sufficient? or you need both?
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Old 10-15-2014, 09:52 PM
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IS CERA +CFA sufficient if you were in a risk management department ? or CFE alone will be sufficient? or you need both?
CFE is Certified Fraud Examiner? I am a CPA and I work in ERM department at a regional bank. Non of my co-workers are actuaries. Majority of them are accountants, some have CFAs, and a good chunk of them have MBAs, and FRM/PRM. We have one quant person, he has a PhD in physics of some sort, so we get him to do all our programming and etc.

So it really depends what type of risk management work you want to do... would depend on what qualifications you want to pursue. Also depends the what level of risk management the bank is at.. currently many banks have to be basel 3 compliant, so CERA would help in sense for building aggregate models and calculating the VaR etc. But I don't know if CERA would be helpful in more of the soft skills area, i.e., maintaining/developing an ERM framework and testing whether controls in that framework are working properly... and establishing a review and challenge mechanism under the framework tools. under a risk management framework, you have many tools that you need to give to the front line staff to manage, then as a second line of defense (such as ERM department), you need to provide review and challenge on many of those tools.

Risk management is broad... we have groups that specializes in market risk, operational risk, credit risk, basel and stress testing, anti-money laundering, privacy, legal, regulatory compliance, credit adjudication, and we have tons of other credit people (due to bank makes most of its $ from loans, so credit risk is BIG).

I haven't studied CERA yet, but I know many senior management ppl at the banks wouldn't rely on a CERA's mathematic models... or their VaRs... due to the fact that if you have tons of data, and you build a VaR model... an individual won't be able to explain what is the main drivers of that model, why is it at that level, how can we reduce it? what are the control failures etc?

And also, there are many basel 2 and 3 compliance regulations, so if a bank goes to the advanced measurement approach which uses frequency and severity modelling, we really don't know if this will help relieve any capital measures. will they be stuck holding more capital? because from my understanding, the goal of many banks is to hold less capital, so they can use that capital and invest it or loan it out to generate more profit.

just my 2 cents.. I coudl be wrong but this is what I've seen from my risk management career. and now, only if I can pass exam C.. sigh..

Last edited by JackLee; 10-15-2014 at 09:55 PM..
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Old 03-13-2015, 10:17 PM
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Originally Posted by JackLee View Post
CFE is Certified Fraud Examiner? I am a CPA and I work in ERM department at a regional bank. Non of my co-workers are actuaries. Majority of them are accountants, some have CFAs, and a good chunk of them have MBAs, and FRM/PRM. We have one quant person, he has a PhD in physics of some sort, so we get him to do all our programming and etc.

So it really depends what type of risk management work you want to do... would depend on what qualifications you want to pursue. Also depends the what level of risk management the bank is at.. currently many banks have to be basel 3 compliant, so CERA would help in sense for building aggregate models and calculating the VaR etc. But I don't know if CERA would be helpful in more of the soft skills area, i.e., maintaining/developing an ERM framework and testing whether controls in that framework are working properly... and establishing a review and challenge mechanism under the framework tools. under a risk management framework, you have many tools that you need to give to the front line staff to manage, then as a second line of defense (such as ERM department), you need to provide review and challenge on many of those tools.

Risk management is broad... we have groups that specializes in market risk, operational risk, credit risk, basel and stress testing, anti-money laundering, privacy, legal, regulatory compliance, credit adjudication, and we have tons of other credit people (due to bank makes most of its $ from loans, so credit risk is BIG).

I haven't studied CERA yet, but I know many senior management ppl at the banks wouldn't rely on a CERA's mathematic models... or their VaRs... due to the fact that if you have tons of data, and you build a VaR model... an individual won't be able to explain what is the main drivers of that model, why is it at that level, how can we reduce it? what are the control failures etc?

And also, there are many basel 2 and 3 compliance regulations, so if a bank goes to the advanced measurement approach which uses frequency and severity modelling, we really don't know if this will help relieve any capital measures. will they be stuck holding more capital? because from my understanding, the goal of many banks is to hold less capital, so they can use that capital and invest it or loan it out to generate more profit.

just my 2 cents.. I coudl be wrong but this is what I've seen from my risk management career. and now, only if I can pass exam C.. sigh..
Extremely late on commenting on this, but as someone with both a CERA & FRM credential, I can say that the credentialing process is any indication of the basic qualifications a person needs to pursue a career in ERM, the CERA is far more rigorous to obtain. The FRM, while not an exam to take for granted due to its sheer volume, doesn't quite test the material the same way.

As JackLee mentions, though - obtaining your CERA would not, out of the box, necessarily qualify you to build a sophisticated ERM risk-based model that a company can depend upon for all its risk-based decisions. (That's not to say you won't be qualified, but basing your ERM skills solely on the syllabi from the CERA credential isn't enough.) I think people who obtain the CERA can bridge the mathematical results (for which someone like a quant might be able to perform/serve) and the financial/operational theory (where someone like a investment manager or operational risk director might be) and assess risks at a corporate level.

Holding the master key to the model as the main programmer doesn't mean that you are the lead risk analyst/officer.

Just my thoughts.
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