I can’t seem to decide which of the prep providers have the better lecture videos. I quite like Mark Meldrum’s videos (from sampling them on Youtube), but some of them seem too long.
I would appreciate if anyone of you out there who used the respective providers letting me know which of them to choose.
Thanks!
I have 10 mock exams to give away for the CFA Level 1 for December 2017. They are from Finquiz and Fitch Learning.. Pass along your email IDs and I will forward them to you.
Hi,
I posted the following message in an old thread but I do not see it appear on the main page so I post it again but as a new topic:
I do agree with the definition of S2000magician (price is what you pay for and value is what you should pay for) but how is it that the difference between price and value can be so huge then. For example, a forward contract on a bond can be priced 1000 and valued 20.
Thanks.
From page 530, reading 13, example 3:
#2:Spot rate (CHF/GBP): 1.4939/1.4941. Six months forward points: -56.6/-54.0
The all-in rate that the dealer will be quoted today by another dealer to see the CHF six months forward against the GBP is closest to:
A. 1.48825 B. 1.48835 C. 1.48870 Answer is C.
From page 538 reading 13, example 4:
#5: An Austrialian-based income asset manger is deciding how to allocate money. Note the base currency in the exchange rate quote (AUD) is the domestic currency for the asset manager.
JPY/AUD spot rate (mid-market): 79.25. One-year forward points (mid-market): -301.9. One year Australian deposit rate:5%. One year Japanese deposit rate: 1%
If the asset manager completely hedged the currency risk associated with a one-year Japanese deposit using a forward rate contract, the one-year all-in holding return, in AUD, would be closes to:
A. 0%, B.1% C 5%. Answer is C.
#6: The manager then collects info, with JPY One-year Libor .10%, USD .10%, and GBP 3.00%, to estimate the investment returns and future ex rate movements. If Covered Interest Rate parity holds, the all-in one-year investment return to a Japanese investor whose currency exposure to the GBP is fully hedged is closest to:
A. .10% B. .17% C. 3.00%. Answer is A
From page 559 reading 13, example 8:
#1: She examines two countries—one DM and one EM—and notes that the DM country has what is considered a low-yield safe haven currency while the EM country has a high-yield currency whose value is more exposed to fluctuations in the global economic growth rate. Kwan is trying to form an opinion about movements in the exchange rate for the EM currency.
All else equal, the exchange rate for the EM currency will most likely depreciate if the:
long-run equilibrium value of the high-yield currency is revised upward.
nominal yield spread between the EM and DM countries increases over time.
expected inflation differential between the EM and DM countries is revised upward.
Answer is C.
Institute, CFA. 2018 CFA Program Level II Volume 1 Ethical and Professional Standards, Quantitative Methods, and Economics. CFA Institute, 07/2017. VitalBook file.
The citation provided is a guideline. Please check each citation for accuracy before use.
Hello,
I read this with regard to managing crash risk for carry trade strategies (in regards to FX).
“when a currency falls below/above the band, the trader will overweight/underweight that currency in the traders carry trade portfolio.”
Is it saying that when the value of a currency falls, we are going to take a bigger position in that specific currency? Why is that the case, especially if the value of the currency has fallen below a certain threshold?
Thanks
Dear all,
In R13 subsection 6.2, one line is confusing me:
“With inflexible domestic prices in the short run, any increase in nominal money supply results in a decline in the domestic interest rate”
Why? This is not intuitive to me.
From a practical standpoint, what do you use for the Effective Tax Rate in the unlevered beta calculation if the firm has pre-tax losses?
Hello,
Seems like there is alot of variation on this site, but when I should try to finish the readings by?
I was thinking of finishing the readings by mid december, then work on practice problems until exam day.
I know it is really early to finish the readings and start practice problems, but I won’t be able to dedicate more than 20 hours per week going into 2018.
Does this seem reasonable? What may be the other downsides to finishing the readings this early other than burning out/forgetting the material as we head into next spring?
Thank you!
Hi to everybody,
How is it that Hedge Funds are not part of alternative investments topic?
Have you any idea?
Thanks
The example states Capital in year 1 of 400000, but isn’t it reduced by 100000 depreciation to 300000?
Assets are given as 400000 in year 0 so is it the initial investment of the project?
Hi,
For the question on Venus company, in particular question 41 of CBOK
Exhibit 2, scenario 2 shows the growth rate of dividends; but the question does not explicitly state the required rate of return that would be required to calculate the terminal value. In the answer, the terminal value is calculated using 8% which is the beginning growth rate.
Is the beginning growth rate = to the required rate of return?
Thanks,
Hi,
In the CBOK reading 31 on Free cash flow valuation, practice question 11…
The question provides the following info:
“After three years, the growth rate of net income will be 8 percent and the net investment in operating assets (capital expenditures minus depreciation plus increase in working capital) each year will drop to 30 percent of net income.”
And in the answer provided in the CBOK, to determine Terminal Value, the author multiply the FCFE by 1.08, and in the denominator he/she takes the required rate of return subtract by 8%.
This implies that the author assumes that the FCFE growth rate is the NI growth rate, which in my opinion is not accurate. Because the Net investment in operating assets is not constant.
Or am I missing something here?
Many thanks.
CFAI define I-Spreads as 1) interpolated spreads, which reference a linearly interpolated yield. 2) Additionally, they are defined as bond rates net of SWAP RATES of the same maturities (according to the CFAI!).
Therefore, for the purposes of the CFA, I-Spread is basically (as defined above) the same thing as Z-Spread, except that it is the spread to the respective SWAP RATE given a particular maturity (instead of the spot rate).
On the other hand, my colleague says I-Spread can be defined as a spread that reference ANY linearly interpolated yield, so it does not have to be the spread to the swap curve. This also makes sense if one were to reference the CFAI’s first definition of I-Spread. However, this is incorrect once you reference CFAI’s the second definition of I-Spread.
Can someone please clarify the meaning of I-Spread for CFA purposes, and (if possible) your world applications as per your experience?
Thank you.
(can’t believe I’m not getting this but…)
Could someone please explain me whats the difference between Goodwill in equity method and partial Goodwill (acquisition)?
Dear all,
In R13 subsection 6.2, one line is confusing me:
“With inflexible domestic prices in the short run, any increase in nominal money supply results in a decline in the domestic interest rate”
Why? This is not intuitive to me.
From a practical standpoint, what do you use for the Effective Tax Rate in the unlevered beta calculation if the firm has pre-tax losses?
Hello,
Seems like there is a lot of variation on this site, but when I should try to finish the readings by?
I was thinking of finishing the readings by mid december, then work on practice problems until exam day.
I know it is really early to finish the readings and start practice problems, but I won’t be able to dedicate more than 20 hours per week going into 2018.
Does this seem reasonable? What may be the other downsides to finishing the readings this early other than burning out/forgetting the material as we head into next spring?
Thank you!
Hi to everybody,
How is it that Hedge Funds are not part of alternative investments topic?
Have you any idea?
Thanks
The example states Capital in year 1 of 400000, but isn’t it reduced by 100000 depreciation to 300000?
Assets are given as 400000 in year 0 so is it the initial investment of the project?