Gonna take that one tomorrow, just finished CC exam 1 and yeah it was rough. Any thoughts on which one is the hardest out of the three? Just scraped by, but some questions were really long. I hope imputed interest doesn’t get asked.
What is anybody taking out of the Kreps Spreadsheet?
Given the pattern of the CAS asking questions on the supplemental materials the last few sittings, I feel like there will be a question on this.
I looked at it and really didn’t take anything away. I’m focusing on other things for now.
Has anyone been doing Crystal Clear review questions in Excel? Specifically her Robbin IRR questions D-48 to D-52. I’m struggling to come up with the same answers as her, even following along. I think if I saw them worked in Excel it might make more sense.
Just took CC Practice Exam 2. I know everyone around here is saying her practice exams are super difficult, but this one seemed way more complicated and confusing. Hopefully this isn’t representative of the real thing.
I believe I have the answers for them
Cc1 and cc2 both seemed to be similar difficulty. Cc1 I finished in five hours and cc2 I left out ten points with four hours up. I need to do those ten points.
I got like 69% on cc1 after like an 80% in both of exams. Cc2 I am still taking…
Okay I got destroyed on CC2. Wow demoralizing.
Anyone have any idea how to do 16b and would be willing to walk me through it. I don’t understand the last part. You can PM me. Thanks!
PM’d you.
Glad to know I’m not the only one who thought this was ridiculously difficult. I also felt like some of the point values didn’t make sense (i.e. asking for two pieces of information but only rewarding 0.25 points?)
I always get forward rate year wrong. I did all of them and then pointed to the wrong cell with the answer… And I’m like it’s only worth 0.25 points I got the answer but I pointed to the wrong year… What does that mean since the exam they take off by .25 but not less.
Exactly.
I got tripped up by a few things on this one;
- Question 4, negative risk premium didn’t make sense to me
- The exponential CAT distribution part of 10b (though that’s because I just don’t see it much). This is another one where I don’t think the MP and Proportional answers would have only been 0.25 points each.
- Q14, there is an assumption that DAC = 0.15P, so that suggested to me that all of the variable expenses are incurred at t = 0 and all fixed expenses are at t = 1. Maybe I would have gotten credit for that since I wrote that assumption down, don’t know.
- Q15a, not realizing they were looking for me to adjust correlation assumptions. But now that makes way more sense.
- Q16b, though now that I worked through it I understand it better
Even though it was crazy hard, and I wouldn’t have passed it, I’m really glad to see some of these trick problems now.
The Dac that CC uses doesn’t make sense for that reason. I pointed the same thing out on other questions. You have to assume the .15p is coming from prior policies in her case.
15a - yeah i had no idea it needed to be the same default probability to be fully correlated… who knew
Can anyone send me an Excel solution for 2019 question 9. Or send me a PM explanation.
I am really confused by the answer. I thought I knew how to do this, but it appears I still don’t know this off syllabus topic…
Okay, I figured this out. Two questions:
- Why is the prepayment affect the long pay tranche but not the other two… I guess because they would default last… hmmm.
- Why are we calculating this after time 2, and not time 1?
I took CC2 and I have to agree, it was rough. I was really tripped up by the assumptions on the same few problems AgentF noted. The point values also didn’t make much sense, I think that VaR question being worth the same as the bond question with creating the synthetic cashflow made me overthink about what I was doing wrong for that simple problem… I don’t really know what to think of these, other than that they have decent “gotcha” questions. Her exams are good, but just really long and complicated. I feel like CAS exams are more straightforward at times.
I’m going to stick to drilling problems on specific chapters for the last two weeks, probably will try to work her 3rd exam without grading just to see new questions.
I think the idea is, the long tranches are not going to receive principles until the shorter tranches’ principles expire. And the time 2 is the time principle starts to get paid on the longer tranches because the short tranch (ie A) expires.
How does that mean nominal value?
I just took Spring 2019 today as well and need to circle back to question 9. I don’t think the examiners guide shows enough work for it to make perfect sense. What I did was I attempted to look at for each month who the payments are going to. But I didn’t split principal and interest out, and I flipped the tranches around (thinking the short-pay was the junior tranche). But I still haven’t figured out how to get the “right” answer.