Stay in your lane as pressure build up in May
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Manic May
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Wiley Mocks -- General question
I’ve been saving my wiley mocks till it gets closer to exam date.. Anyone that has done these in the past.. do you know if this is printable or not? Can it be retaken multiple attempts (I know Schweser is a once only thing)… Also, can the exam be paused? ANd finally can I take the AM session one day and PM session next day or does it require continuous?
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How many CFAi mocks are offered by the organization?
I am hearing that people are able to get 4 to 5 CFA mocks, but I I only see one of them offered through the website.
Do you know where I can access the additional mock exams offered by the institute?
Thanks,
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No-Arbitrage Futures Price (Derivatives)
In Reading 40, EOC #1, the question reads:
With the following data (Question 1 in practice problem of Curriculum), why dont they include Accrued interest at futures contract expiration in the first pricing formula, but do include it in the adjusted price formula.
Exhibit 1. Current Data for Futures and Underlying Bond
Futures Contract:
Quoted futures price: 125.00
Conversion factor: 0.90
Time remaining to contract expiration: Three months
Accrued interest over life of futures contract: 0.00
Underlying Bond
Quoted bond price 112.00
Accrued interest since last coupon payment: 0.08
Accrued interest at futures contract expiration: 0.20
Detail answer from curriculum:
The no-arbitrage futures price is equal to the following:
F0(T) = FV0,T(T)[B0(T + Y) + AI0 – PVCI0,T]
F0(T) = (1 + 0.003)0.25(112.00 + 0.08 – 0)
F0(T) = (1 + 0.003)0.25(112.08) = 112.1640
The adjusted price of the futures contract is equal to the conversion factor multiplied by the quoted futures price, adding the accrued interest of 0.20 in three months to get a total price of 112.70.
F0(T) = CF(T)QF0(T)
F0(T) = (0.90)(125) = 112.50
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Do you have to be a ninja to pass this level?
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how long do you spend reviewing one item set of question from a mock
It just took me 6 hours to review just one item set…not sure if its my adhd or not.
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What do you guys think about doing the 5 day review course through Schweser?
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What do you guys think about doing the 5 day review course through Schweser?
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Significance of F-stat
How do we know in the exam the significance of F-stat. There are usually two options in the table one is F-stat and the other is significance of F. If the F critical values are not given how do we know F-stat is significant
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progress
what I’ve covered so far:
solved curriculum eoc n blue boxes , ift qbanks for each topic , read schewser and solved the eoc questions and the questions on the website for all topics except FRA (
), what i want to know is whether it is possible to finish the above things of FRA in a week and finish atleast 1 revision by May end so that i can start doing mocks by june. I’m on leave right now so have all the time. It would be really helpful if someone could assist….thanks
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Off balance sheet financing
Adjustments for off balsnce sheet items include all but which of the following?
A. Using equity method in place of proportionate consolidation to reflect the investment in affiliates
b. Capitalization of operating leases including the amount as an asset and a liability.
C. Estimating probable obligation for contingent liabilities.
Via poe I arrived at A which is the correct answer. But schweseRs explanation is confusing me. It says “the correct statement is that proportionate consolidation should be used in place of the equity method”
Can someone explain this?
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Private equity valuation question 10 from reading 45
Hi all,
I’m a bit confused with the practice question for 10 from reading 45.
Question 10.
The answer says “Chau mistakenly believes (assuming the same management skill) the result for Alpha Fund at termination will be on the order of 3 X 0.65 - 1.95 instead of 0.65.”
Why are they multiplying 3 in there?
And just to clarify my answer, her first statement is incorrect because Beta has a higher RVPI (which shows the high return on the remaining fund year). Second statement is wrong because DPI (which shows the distribution over the committed capita) is low compared to Gamma. Does this make sense?
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Long call option payoffs - Reading 41 Example 1
Hi all,
I’m looking for a bit of assistance in understanding the Example below - when I think about this from an arbitrage perspective, it seems to make sense in my mind, but for some reason just can’t make sense of replicating the payoff of the option. In short, I feel like the solution below leaves us with 2 x the call option profit/loss. If that’s not the case, could someone please explain why?
Identify the trading strategy that will generate the payoffs of taking a long position in a call option within a single-period binomial framework.
A. Buy h = (c+ + c–)/(S+ + S–) units of the underlying and financing of –PV(–hS– + c–)
B. Buy h = (c+– c–)/(S+– S–) units of the underlying and financing of –PV(–hS– + c–)
C. Short sell h = (c+– c–)/(S+– S–) units of the underlying and financing of +PV(–hS– + c–)
Solution:
B is correct. The following table shows the terminal payoffs to be identical between a call option and buying the underlying with financing.
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Stock offer vs. cash offer
Hello,
So today, I came across a problem regarding cas vs. stock offer on a merger of two companies.
Pre merger value of the acquier: 132 million
cash paid for the target: 90 million
post merger value of the combined entity via cash buyout: 135 million
pot merger value of the combined entity via stock buyout (shares issued to target shareholders): 132 + 90 + 3 (synergy value)
Not exactly sure why the value of the combined entity would be different under the stock buyout (225 million) vs. the cash buyout?
Is it because we are issuing shares under the stock buyout (therefore, “expanding” the size of the firm) whereas under a cash buyout, we are simply exchanging the assets of the target entity for cash from the target shareholder (thus no “expansion” of the firm occurs)?
Thanks,
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Portfolio management
Active return calculation doesn’t contain active weights, but active risk calculation does, right?
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is notes payable included in EV calculation?
According to a CFAI practice question (Metiu Metev Case Scenario) it is not part of the EV, but isn’t note payable a financial liability and needs to be included?
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I'm finding the Schweser mocks quite easy
im through with exam booklet 1
and scores are 72%, 78% and 80%
honestly I’m more freaked out by having higher scores than I am lower scores. This is nothing but a false sense of confidence I feel.
What should I do? Switch mock exam providers? Where can I buy more? I purchased the Wiley mocks but they’re all online.
Has anyone tried the IFT mocks?… trying to pass L2 for the third time so please one of you expert tell me where to go and I’ll put the work in
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Is it worth wasting time on Schweser Mocks?
Some here are saying that Schweser mocks have not helped them, and it seems to them to be a waste of time.
I am limited with the time i have (two months until the exam) so I want to know which exams from which source are the best to go over.
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cfa end of chapter questions
Hi guys Im struggling on this question. there are 2 companies silk road and color concepts. Its a fairly long paragraph of details but the important details you would need to know is that there is an accounting change where all operating leases are going to be capitalized. this is the specific parts of the q”
“After examining lease disclosures, Leenid estimates the average lease term for each company at 8 years with a fairly consistent lease expense over that time. He believes the leases should be capitalized using 6.5 percent, the rate at which both companies recently issued bonds. While examining the balance sheet for Colorful Concepts, Leenid also discovers that the company has a 204 ending asset balance (188 beginning) for investments in associates, primarily due to its 20 percent interest in the equity of Exotic Imports. Exotic Imports is a specialty retail chain and in the most recent year reported 1,230 in sales, 105 in net income, and had average total assets of 620”
Silk Road
Colorful Concepts
Revenue
3,945
7,049
EBIT
318
865
Interest expense
21
35
Income taxes
121
302
Net income
176
528
Average total assets
2,075
3,844
Average total equity
1,156
2,562
Lease expense
213
406
question is
Ignoring the impact of any accounting change, the asset turnover ratio for Colorful Concepts excluding the investments in associates would:
stay the same.
increase by 0.10.
decrease by 0.10.
the correct answer is apparently b whereas i had my answer down as A. the explanation for why its b is “B is correct. The asset turnover ratio (sales/average total assets) without adjustment is 7,049/3,844 = 1.83. To compute the asset turnover ratio excluding investments in associates, the average investment in associates [(204 + 188)/2 = 196] is deducted from average total assets. The adjusted asset turnover ratio is 7,049/(3,844 – 196) = 1.93. The asset turnover ratio increased by 0.10”
my question is why are we doing any adjustment for assets at all? this is investment in associates which means its equity method which means there should be no adjustment to assets because equity method just takes the same assets as before so sales/assets should be exactly the same as before as well. the only difference I can think of implementing the equity method is that current assets are split between cash paid for investment in investee and the remainder as current assets but otherwise the same assets figure is reported as before.
can someone please advise?
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Capital Budgeting After Tax Cash Flows
Hello, can someone please help me figure out what im missing..seems like whenever i solve a problem that asks for the after-tax cash flow of the project per year, i cant seem to figure out if i only need to add back the tax savings of the depreciation or the full depreciation amount to get the total cash inflow.
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