Chapter 5 - Stochastic Models of Investment Returns

Discussion in 'CM2' started by pmullan1, Feb 19, 2019.

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  1. pmullan1

    pmullan1 Member

    Hi Guys

    I have been working through the revision booklet for Chapter 5 (Stochastic Models of Investment Returns) and there are a wide variety of questions which seem to cover more material than the course notes.

    Is there a expectation on the type of question expected from this chapter? e.g. Is is necessary to know each of the annuity functions? Annual / monthly / continuous / in advance / in arrears?

    Thanks
    Patrick
     
  2. Calm

    Calm Ton up Member

    That particular topic is the last one in CT1, and based on the past year questions it's almost always lognormal (either with mean and standard deviation or the parameter values given) if continuous, binomial if discrete. I understand that in a couple of instances, this question within CT1 did appear as a part question following an annuity calculation. Although it's unlikely that you would be specifically tested on it, but they could (presumed knowledge).
     

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