Sharpe Ratio, Treynor Ratio and Jensen’s Alpha (Calculations for CFA® and FRM® Exams)
Portfolio Performance Measures Portfolio management involves a trade-off between risk and return. Most amateur investors mistakenly focus only on the return aspect and lose sight of the risk taken to achieve the return. The portfolio performance measures are intended as…
Spot Rate vs. Forward Rates (Calculations for CFA® and FRM® Exams)
Spot Rates A spot interest rate gives you the price of a financial contract on the spot date. The spot date is the day when the funds involved in a business transaction are transferred between the parties involved. It could…
Everything You Need to Know About FRM Exams
The Financial Risk Manager program (FRM) is an exam certification that is offered to individuals interested in working in the financial risk management department of firms. It is an internationally recognized certification that is administered by the Global Association of…
FRM Part 1 Changes from 2019 to 2020
Here are the major changes for FRM part 1 for 2020: Book 1 – Foundations of Risk Management Chapter 1: The Building Blocks of Risk Management (Previously: Risk Management: A Helicopter View) ADDED: Explain how risk factors can interact with each other and…
Financial Models
A “financial model” can be a lot of things. The phrase is usually used to describe a representation of a real financial situation. Financial models typically use a set of assumptions and inputs to generate an output or set of…
FRM Part 1 Exam – 3-Month Study Plan
I sat and passed FRM Part 1 in May 2018, in Frankfurt. Easy as that sounds, make no mistake – it was a tough ride! Even with an MSc. In Business Administration and specialty in corporate finance, I still knew I…
FRM Changes from 2018 to 2019
FRM Part I Changes in 2019 For FRM part I, there has been no addition or deletion of any chapters. In fact, some chapters have been rewritten but for the most part, all learning objectives have stayed the same. The…
The FRM Program: Expectations, Benefits, and Tips
Introduction A Financial Risk Manager (FRM) that desires to be recognized by the Global Association of Risk Professionals (GARP) is required to pass an exam that grants hopefuls the right of passage into fulfilling careers within the world of finance….
Central Counterparties
Central counterparties, also known as CCPs, protect market participants from counterparty /credit/default risk and settlement risk by guaranteeing the trade between a buyer and a seller. By doing so it helps avert the cascading impact a counterparty default could have…
Open Market Operations – A Tool for Inflation and Interest Rate Targeting
OMOs or Open Market Operations are a commonly used tool by Central Banks to administer the monetary policy. Central Banks try and control the price and quantity of money in the economy through the implementation of the monetary policy, price of money being interest…
