etivyas

[etivyas]

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You look pretty much on track. I think doing couple of practice papers and then doing revision will help you identify your weak areas and focus more on them in your revision. Also can start making your formula and key point sheets while doing practice questions as well as revision.

[etivyas]

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Thanks @mitch895 . very well explained. So of Duration of assets is larger than liabilities, reinvestment risk should have no role to play and only how total value of portfolio changes wrt liabilities when rates move will determine if assets are sufficient to cover liabilities?

[etivyas]

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Hello everyone,

I am a CFA Level 3 candidate in London. Registered just before 2nd deadline and now panicking a bit. Also feeling unfortunate as how come I missed this forum earlier. Looking forward to some interesting discussions.

[etivyas]

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I realised after posting that reinvestment returns with work to offset gain/loss from price changes, that’s the whole purpose of immunisation but again how to place both of them together. Like in 1st case when rates go down, also value of liabilities goes up more than assets and reinvestment returns go down, so do we expect a shortfall for sure and vice versa? In 2nd case when rates go up  and value of assets goes down more than liabilities, do we expect reinvestment returns to cover the shortfall as these should go up?

Probably I am blabbering or just over thinking.

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