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Hello, For question 1 the max price paid is calculated as E(U(w-P+X)) = U(w) In the notes the max “premium” paid for insurance is E(U(w-X)) =...
Hello, For the black scholes chapter, there is a lot question where the payoff is S1 - 35 if 35<=S1<=45 10. if 45<=S1<=55 65 - S1 if...
Hello, For part (ii) in the question, why do we take dividends into account? Do the dividends affect the share price? I would think that for a...
Hello, For Q9 in the Sept2023 exam: Why do they add 0.1*exp(-0.02*10) at the end when calculating the price? Also, how does this question differ...
Hello, In the practice question 8 and 9 (2023 version of notes), both questions have the same formula for the GBM. S_t = exp(mu*t + sigma*Bt)...
Hello, Can anyone please explain the answer of practice question 20.7 in Chapter 20? [Prob of ruin at first claim] Thank you!
Hello everyone, When pricing forward contracts - how do you decide on how to construct the two portfolios? Is there a rule of thumb? Many thanks!
Hello, For part (i) of question 8, why can’t we calculate the expected return of the market portfolio by using the table given in the question...
Hi All, For the CT4 2016 Sept exam Q10 (ii), they ask us to calculate the probability. However, they give 1-hazard rate as the answer. Shouldn't...
Hi All, For Question 9 (iv): Would it be correct to say that the prob = 1 - p(James staying with company A for the next two years) = 1 - 0.56^2?...
Hi All, For Q3 in the practical paper, they identified the model as ARIMA(3,0,0) because there PACF = 0 for all k>3. However, I don't see the...
Hi All, I started studying for the CS2 exam and I'm feeling totally overwhelmed by all the information. Any tips on how to approach this exam?...
Hi Everyone, I have a question about CT5 September 2018 Question 9 part ii). Why do the include interest for half a year on cost of death,...
Hi everyone, For the Net Premium Reserves: 1) Should you calculate your net premium using the reserving basis and not the premium basis used to...
Q3.2 I understand the concepts of first and second order dominance, but I don't understand what they are doing in these two questions, especially...
On p14 the alternative definition of certainty equivalent states that: cx<0 Why would the certainty equivalent of the gamble alone be negative?...
Does the new 2019 curriculum differ a lot from the 2018 curriculum? If I were to rewrite Contingencies in 2019, should I purchase the new material?
