Risk Magnitude Ranking Tip
Post deleted because this memory trick has been updated for the new edition of Odomirok. See post below...
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Post deleted because this memory trick has been updated for the new edition of Odomirok. See post below...
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For the Odomirok Rank for Spring 2021 memory trick....
R2 Equity
R4 Reserves
R5 NWP
RCat
R3 Credit
R1 Fixed Income
2 Early
4 Reading about
5 New
Category
3 Cyclones just
1 F'ing Island away
Is this table still in Odomirok? The wiki says page 244 but I don't see it. I tried searching some key words but could not locate it.
Its table 75, p248
Are we looking at the same edition? In the 2019 edition that I've got, table 75 is on page 243 and table 76 that is shown in the wiki is on page 244.
Ok, I see it now, my bad, my eyes skipped over the clearly labeled "Table 76" in the wiki and jumped to the pop quiz/colors. It is on page 249. The latest linked version on the syllabus is 2020 edition.
Small tweak that just works a bit better for me, putting it here for anyone else it may help:
R2 Equity
R4 Reserves
R5 NWP
RCat
R3 Credit
R1 Fixed Income
2 Everyone
4 Reads
5 New
Category (but)
3 Can't
1 Figure It (out)
is this industry aggregate risk ranking an order we should have memorized for the exam?
No, not really. It's just one of things that helps give context to the material. However, It isn't a bad idea to know in general that equity risk and U/W risk are the biggest drivers.
An exam question might provide a scenario and ask you for ways to reduce the RBC charge for a company. So if you explained how to reduce fixed income asset risk, you might not get any points because that item is responsible only for a small portion of the RBC charge. You would be better off explaining how reserve risk could be reduced (maybe by shifting business to shorter-tail lines that have less risk.)
thank you, that is really helpful!