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in reply to: CFA Mock Exam Evaluation (Level 1) #85956in reply to: Revision strategy for L1 #85896::
Seems like you’ve done a solid prep so far.
Yes, doing lots of practice questions, especially under exam conditions and timed, would be super useful the last month. Try the CFAI mocks under timed conditions too, and see where you’re lacking in understanding in terms of topic. Read up that section, and reiterate till exams really! Good luck!
in reply to: Int rate increase and decrease with options #85881::interesting, did you choose C by any chance as I would have? Because I’d have thought increase in dividends decreases the stock value by the same amount, therefore decreasing the value of put option.
Whilst I get that higher risk-free rate also reduces the put option value, but the extent of that would be minimal compared to reductio in underlying stock price. Hence by answer choice of C.
Did the question offer any good explanation?
in reply to: Discount margin to value risky floater #85854in reply to: Discount margin to value risky floater #85846::Credit spread. It contains many components priced in for, e.g. liquidity risk, default risk etc. I found this article quite interesting in detailing the study on it (https://blogs.cfainstitute.org/investor/2012/04/03/components-of-credit-spreads-and-their-importance/)
in reply to: Updated Cancelled Locations! #85814::bummer, mine got cancelled/postponed too. GARGGHHH!
Well, if you’re twice postponed, you can actually ask for a full refund if you want to.
I’m the same, twice postponed, but stuck in L2, so I have to just wait it out and finish it.
doubt they will reinstate paper based exams, CBT is shorter times and less questions, probably something you need to get used to since you’re just starting!
in reply to: portfolio return ? #85813::Hi, there seems to be quite a few errors in your copy/pasting of the question, can you make sure it is right?
I assume the probabilities are 30% boom with 15% return, and 70% bust with 3% return.
So the mean return is 6.6% = (0.3*0.15) + (0.7*0.03)
The answer notation is messy too, as the power function is missing.
But in essence the answer is correct where std deviation is 5.5% = [0.30*(0.15 – 0.066)^2 + 0.70 × (0.03 – 0.066)^2]^0.5
in reply to: REinvestment risk #85812::If YTM drops before a coupon is paid, that means you will reinvest your coupon (which is fixed $) at a lower interest rate than at inception (when you first bought the bond).
Therefore, you’ll get a lower yield from reinvesting your coupon ==> reinvestment risk increases.
Since the bond is held to maturity, this means that there is less/no price risk (i.e. making a loss if the bond is sold before maturity, where sale price may be lower than purchase price if YTM has increased).
Both price risk and investment risks offset each other partially. The shorter the investment horizon, the smaller the coupon reinvestment risk, but the bigger the market price risk, and vice versa.
in reply to: Can you do this on a calc using N, IY, etc.? #85811::The explanation seems to have incorrect notation and missing the power function. Also I’m not sure whether the bond price stated in the question as 93.50 or 935.0? Because the answer shows 935 but I’ve used 93.50 as what you copied down, but the principle is the same (but assuming a $100 par instead of $1,000 par like the explanation)
Total future cash flows = 93.50 * (1.035)^ 30 = 262.435
Bond coupons = 15 * $7 = 105
Principal repayment = $100
So reinvestment income = 262.435 – 105 – 100 = $57.435
What part of the question/answer do you not understand? Will see if I can explain
in reply to: Stop-Limit orders #85808::Hi @lucho37 , the question asks what is the maximum loss Jim can experience, so B is correct given the $55 limit buy.
In the theoretical case you had mentioned, yes stop will be activated, but given the $55 limit, there will be no buys executed. When there are no purchases of stock executed at above $55, there are no losses realised.
Does this make sense?
::Hey @AygulG – I think it is what it is unfortunately. Yes I’ve seen that face covering is a requirement, which is good and safer for everyone.
I personally think I would be more stressed if someone is sneezing and no one is wearing face coverings!
During the exam, I doubt you’ll have time to feel stressed about face coverings though, as that will be the last thing in your mind as you focus on answering the questions.
It may be a good practice to do practice papers under timed conditions with face coverings to better simulate the exam experience.
in reply to: No appointments available for Dubai Feb’21 #85802::Hi @Kashish , so it means that it is fully booked or there is no capacity left. There is probably a lot of Dec candidates deferring to that as well that’s why it’s best to book early. You just have to choose an available test center with a different time.
With CBT, you need to secure an appointment at an available test center. So you may need to try May21 and secure that slot now, because if Feb21 gets deferred most of the candidates are going to choose May21.
in reply to: Exchange Rate #85800in reply to: Rejecting the Null #85788::A is “less than”, i.e. mathematically it is “<". C is “not greater than”, i.e. mathematically it is “<=" or "less than or equal to". If he believes that returns on Mondays are GREATER than on other days, he needs to find a null hypothesis than is the opposite (and reject that statement), i.e. returns on Mondays are “NOT greater than” (which includes the case where it can be “equal to” as well).
in reply to: Fixed Income Risk and return #85781in reply to: Fixed Income Risk and return #85778::Because your effective duration is calculated on the change in yield of 1% (i.e. bond price when yield is at 6% and 4%, vs. 5%).
In the formula:
105.56 is the price when yield is at 4%
98.46 is the price when yield is at 6%
And your PV0 is when yield is at 5%
So the change in yield is 1% (vs. 5%)
Does this make sense?
in reply to: Quantitative Methods #85769::Hi @pcunniff – there’s the nCr function in BA II Plus calculators on top of the “+” sign.
So for “8 choose 7”, i.e. 8C7, here are the keystrokes which should get you the answer 8: 8 [2ND] [+] 7 =
For “8 choose 8”, i.e. 8C8, the answer is 1 (without the need to do the calculations), because there is only 1 way to choose 8 items out of 8. But just in case the keystrokes here follow the same principle (which should give you 1): 8 [2ND] [+] 8 =
in reply to: sample standard deviation #85737 -
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