So what did you think? I think the paper was ok, but don't think I did that great What was that fractal thing on about!? I'm sure that's not in the notes.
If securities markets are leptokurtotic in distribution, then fractal theory can be used to predict future prices. How did you not know that???! Honestly I had no idea either...I couldnt remember reading about it in the notes. I think the paper was quite tough...not as many easy marks available as in previous papers. The state price deflator question stumped me big time.
Seemed as though there weren't so many bookwork questions as previous papers. And precious little on efficient markets which has figured heavily before. The fractal bit was only 2 marks, so I wouldn't worry too much!
For anyone that cares... I have looked on the web and Brownian motion has a fractal dimension of 2 and a straight line has a fractal dimension of 1. So if the fractal dimension in the questions was 1.4 then maybe we were meant to say it's path is less rough than Brownian motion, but more rough than a straight line?
I thought the paper was quite easy I can't say with any certainty I passed but I will be quite dissapointed if I failed. The only questions I didn't answer were the last four marks asking about credit risk bond formula and intensity things because I ignored that bit of the notes ... oops .... and also the two mark fractal dimension thing.
