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ERM Exam Old Advanced Finance and Enterprise Risk Management (ERM) Forum 

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#51




in VAR chapter 8, page 196, the var% for GM is 14.01%.
In dollars, this is .1401*33.33 = 4.67. if you divide 4.67 by 1.65, then divide by 33.33, = .085. .085 is the volatility. Then the variance is .085^2= .0072. So in the table, why is the covariance quoted as 72.17? Or more generally, why are they so large? It says numbers are reported in percentage monthly returns. So what does 72.17 as a percentage monthly return mean? It looks like the tables are showing the variances and covariances X 10,000. 
#52




It should be well less than that, but depending on where you are located, I suppose that could be the max time. I get mine usually in about 4 days (located in the US).
__________________
Paul  CFE/SDM/ERM Online Seminar Instructor www.pakstudymanual.com PAK Study Manual Packages/Seminars for CFE/SDM/ERM Spring 2018 SDM: Sample CFE: Sample ERM: Sample 
#53




Quote:
From there, your math is spot on. 8.5^2 = 72.25 (off by rounding) And, conceptually, this should be the same number as the variance you calculated, since the diagonals in a covariance matrix are just the variance of that asset. But, we have to remember to move the decimal over (or, conversely, add a % sign to our number). And as long as you remember this convention they use, it's easy to get back to more usable values. For example, if we worked backward from 72.25, we'd come up with a volatility of sqrt(72.25) = 8.5. Using this texts convention, we know that this is actually a percentage, so we turn it into 8.5%. Multiply that by 1.645, and you get the VAR % they list in Table 83. You can see an example of them using this right above Table 8.2. They say... Quote:
That said, is it an annoying convention, especially since they don't make it clear? You bet it is.
__________________
Paul  CFE/SDM/ERM Online Seminar Instructor www.pakstudymanual.com PAK Study Manual Packages/Seminars for CFE/SDM/ERM Spring 2018 SDM: Sample CFE: Sample ERM: Sample 
#56




It varies, and is affected a bit by what Extension you choose, but I would expect somewhere in the range of 25% +/ 5%.
__________________
Paul  CFE/SDM/ERM Online Seminar Instructor www.pakstudymanual.com PAK Study Manual Packages/Seminars for CFE/SDM/ERM Spring 2018 SDM: Sample CFE: Sample ERM: Sample 
#57




Quote:
The key practical benefit of having a deeper foundation in the insurancespecific things is that it makes the syllabus more meaningful  hence easier to remember and easier make sense of things that people might otherwise just skip over. I would say that there is plenty of time to pass any of the upcoming spring FSA exams at this point, and I see tons of people pass the core exams when starting in January. Even though people start earlier than ever these days, sometimes I think having a more compressed and finite timeframe can be an asset because it increases the urgency "per hour" of study time. 
#58




I have a quick question for the TIA staff. My method of studying for the last two FSA exams was to print out the flash cards on two sides using the fancy "flash card" paper. I then memorize as much of those flashcards as I can. It looks like these printable flash cards do not exist in the ERM study materials? Is this method of learning not as helpful for the ERM exam? Sorry in advance if I just missed it.

#59




Quote:
As for which method of learning is best for ERM, I think any successful method you applied to the 5hr exams will also work for ERM. For ERM, there are a lot of lists, and we cover all of them in our video lessons. I think it makes a lot of sense to print the lesson handouts (maybe not on that fancy paper) or keep them in tablet that allows you to handwrite on them digitally. I think it is a very good idea to make notes on them and even practice memorizing the lists as you study. I talk to lots and lots of folks that follow this approach on the way to passing. I think if you can regularly make notes on those handouts, review them, and also use the flashcard apps, that will provide a really good system for memorization. 
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