2012 CFAI AM paper - Q6A calculating return objective of DB Plan
@vincentt @ravivooda How come we don't need to add inflation to the 5%? How has expected future liabilities already been incorporated expected inflation-related adjustments. Is this always the case for...
View ArticleSwap duration - Schweser 1PM - Q44
@vincentt @ravivooda @Sophie Given: The company enters into a 2 year swap with semi coupon payments to pay floating and receive fix. Question states duration of the fixed side of the swap is 1.2. I...
View ArticleCFAI practice and mock exam site down?
I've been trying fruitlessly to access the practice test and mock exam page of the CFAI website, but I just can't get there. I saw on another forum that other people are having the same problem. Is...
View ArticleSchweser Exam 1 PM - Q26
@vincentt @ravivooda @sophie why is the answer B? Given: Economist believes long term interest rates should fall over the next year, but the short term interest rates should gradually increase. The...
View ArticleSchweser Practice Exam 3 AM - Question 9a
The text: "Wilson wants to enter law school, which should take three years and cost $45,000 the first year, increasing annually by the rate of inflation of 3%." "Wilson is particularly interested in...
View ArticleCFAI 2013 AM - Question 7D
@Alta12 @RaviVooda is this question even in 2014's syllabus? Hagar decides to decrease the equity allocation in the pension plan from 60% of plan assets to 40%, by shifting 20% of the portfolio from...
View ArticleCFAI 2013 AM - Question 9B
Text: Trade 1: Sell a 3-year maturity AAA corporate bond and buy a 30-year maturity AAA bond of the same issuer based on the expectation that credit spreads will tighten uniformly by 10 bps across the...
View ArticleCurrency Management: standard deviation of DC...want to understand the logic...
@vincentt @RaviVooda Why is weight of RFC and RFX in the formula assumed to be 1? I can memorise this but want to understand the logic behind it. Thanks!
View ArticleCFAI 2013 PM Question 50
@alta12 @RaviVooda For the 9th Itemset question 50, it ask about how to achieve the new target duration, in exhibits 2 there's info on CTD and also future contracts, how do we know when to use CTD or...
View ArticleSchweser Exam 2PM Q33 - Explanation
@vincentt @RaviVooda Given portfolio effective duration = 5.42 and spread duration = 6.25. Schweser stated that for 50bps change in the zero volatility spread should lead to 6.25 / 2 = 3.125% change...
View ArticleCFAI 2013 AM Q3a - Behavioral utility
Can someone explain why Friedman-Savage utility function and Prospect theory seem to contradict each other? Pg 18, Vol 2, Prospect Theory says concave for gains (implying risk aversion), convex for...
View ArticleImmunisation and YTM
@vincentt @RaviVooda I don't understand the following in relation to immunisation. Please help... - For an upward sloping yield curve, immunisation target rate of return < YTM because of the lower...
View ArticleDifference bw Multiple Liab Immun and Cash Flow Imm - confused
Hello, In Multiple Liab immunization - each existing portfolio cash flow stream is set off against the maturing liabilities to be paid and in cash flow immun. you buy a bond that matches the last...
View Article2007 Paper AM - Q.2 Ingrams IRR calc for nom return
Hi there, Cant understand IRR calc for nominal req rate of return. Arent PV (the current portfolio) 4m, and payments both negative inputs, as PV always negative ?? and withdrawals / pmt 205,000 going...
View ArticleBehav Finance - confused with Difference bw Anchoring and Adjustment and...
Hi, Difference bw Anchoring and Adjustment and Conservatism Anchoring and Adjustment - is sticking to original forecast - gtg attached to it. O/wtg old info and U/wtg new info and its an Information...
View ArticleOrder of answering Questions
@Sophie @vincentt @Alta12 @Marc @christine While we are answering sub questions under a question, should we answer in the same order? Suppose under question-1, we are given 5 blank pages and it...
View ArticleClik here to view.
What does number of member firms means?
@alta12 @RaviVooda I'm aware that the higher the number of member firms the better it is, however I thought the firm was referring to the number of companies in the equity market, but it doesn't seem...
View ArticlePaper 2007 AM - Q6 Part B - Risk tolerance of Life Insurance co.
Hi, Paper 2007 AM - Q6 Part B Dont understand why the liquidity need for a life insurer increases with a larger share of fixed-rate annuities in the product line, thus lowering risk-taking ability. Is...
View ArticleSchweser-Vol2-Test-2-Question-7
https://www.dropbox.com/s/85vtnmvp94n69k0/Screenshot%202014-05-24%2022.28.38.png Doubts related to liquidity and risk tolerance 1. Liquidity doubt: Since in the question they are saying that very less...
View ArticleSchweser-Vol-2-Paper-2-Question-6
@alta12 @vincentt https://www.dropbox.com/s/qpla41p0t33ljwe/Screenshot%202014-05-24%2022.24.25.png For the solution to the problem where he is asking for utility, I think schweser has the formula...
View Article