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  #151  
Old 09-18-2019, 07:57 PM
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actuarialgenes actuarialgenes is offline
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Originally Posted by CuriousGeorge View Post
In BKM 7, they have multiple formulas for the ideal weight given to debt vs equity in the risky portfolio: w(d) to minimize variance, for perfect hedges, to maximize Sharpe ratio.

Can anyone confirm what is being optimized in footnote 5 (with the risk aversion A in the formula)?

The footnote starts out: Given a level of risk aversion, one can determine the portfolio that provides the highest level of utility. Does that mean this is the optimal split, when no risk-free asset is available?
Risk aversion only comes into play when finding the optimal complete portfolio (which is a weighting between the risk free asset and the optimal risky portfolio. The optimal risky portfolio is the same for all investors and is found by maximizing the Sharpe ratio (which is the slope of the line described below).

Put another way- consider the typical risk/reward chart with volatility (standard deviation) on the x-axis and expected return on the y-axis. No matter who you are and what your level of risk aversion is, we all want to maximize the expected return we’ll get for whatever level of risk we deem acceptable. For this reason, the optimal risky portfolio is the same for anyone. Each investor’s optimal complete portfolio then falls somewhere on the line that runs through the risk free asset on the y-axis and the optimal risky portfolio. (If you’re up and to the right of the optimal risky portfolio you’re borrowing at the risk free rate to invest more in the risky portfolio, creating a levered position).
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  #152  
Old 09-19-2019, 09:09 AM
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Originally Posted by actuarialgenes View Post
Is TIA really so bad for this exam? I used TIA for 5, 6, and 8 and liked it well enough for those. I know this is an unpopular opinion but I actually kinda liked Angelo for 6.
I would be interested in the response to this as well. My standard approach for quite some time has been TIA + source, and so far the only exam where I found that to be inadequate was 7.
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  #153  
Old 09-19-2019, 10:04 AM
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At one point, I had started sifting through last year's threads about this. Here are some random comments/quotes I had jotted down:

TIA+CC+RF cookbook (+1)
TIA+CC served me well
TIA waste of money
TIA helpful, but CC may be better buy
Pleased with decision to go TIA
TIA flashcards useless

"TIA isn't bad, but other options may be better" seems to be the general theme. TIA is the only one that is relatively exhaustive; I believe most others are more targeted in what they cover. I haven't bought anything yet, so take this for what it is worth.
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  #154  
Old 09-19-2019, 02:19 PM
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TIA was bad for 7 and awful for 6. I know Josh is awesome, so I'll use it for 8, but I don't trust their quality anymore.
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  #155  
Old 09-19-2019, 02:19 PM
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imo
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  #156  
Old 09-20-2019, 03:54 PM
SkolChicago SkolChicago is offline
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Quote:
Originally Posted by CuriousGeorge View Post
At one point, I had started sifting through last year's threads about this. Here are some random comments/quotes I had jotted down:

TIA+CC+RF cookbook (+1)
TIA+CC served me well
TIA waste of money
TIA helpful, but CC may be better buy
Pleased with decision to go TIA
TIA flashcards useless

"TIA isn't bad, but other options may be better" seems to be the general theme. TIA is the only one that is relatively exhaustive; I believe most others are more targeted in what they cover. I haven't bought anything yet, so take this for what it is worth.
Truthfully, I thought CC + RF Cookbook + Source is pretty airtight. I have seen some sections of TIA while studying with others and Angelo doesn’t do much except distill down source papers into shorter amounts to save on study time. Great for 6, not overly helpful for 9.

It’s been said on this page but bears repeating: the source should be read for this one. I probably only read 4 source papers on 8 after reading every single one for 9, so know that I’m not someone who always reads it on every exam. It’s very readable for this one.

I took 9 twice and CC was vastly improved for 2019 vs 2018. Closer to a full manual, more practice questions. What she is really great at is writing questions that test your understanding. They build and continue to challenge you. They might not be “exam-style” but they were good at preparing you for numerous ways that questions could be asked on fringe topics. She had two that were almost identical, though slightly less involved, to questions from 2019. Her practice exams are also difficult where if you can pass those, you can pass the real thing.

I didn’t use RF as much as I thought I would coming from 8, but that was probably because I had combed much of CC before using it. Importantly, I think it is worth the price for the Robbin section alone. There are various methods that are basically very rote and specific and Steve lays them out in a way that is easy to ingrain when doing practice problems. It’s particularly useful since the source paper requires you to follow spreadsheets to understand what’s happening, and CC stays pretty high level for that paper.
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  #157  
Old 09-26-2019, 07:21 AM
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just bought CC. planning to get started soon.
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  #158  
Old 09-26-2019, 07:22 AM
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  #159  
Old 09-26-2019, 08:24 AM
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just bought CC. planning to get started soon.
You plan to start with CC? I thought she mostly has summaries and problems...or you are fairly familiar with the material at this point?
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  #160  
Old 09-26-2019, 09:29 AM
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i've heard a few people say it was a full manual
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