Long puts and delta
1. So i have seen that the delta of long puts is negative. When stock price rises, delta of long puts will increase, i.e. becomes less negative and moves from -1 to 0. 2. For the same long put, when...
View ArticleRepo rate
“the more difficult it is to obtain the securities, lower the repo rate”.Should not it be the other way? higher?
View ArticleIts spinning my head - IRCs
The excerpt below is shaking my entire concept of Interest rate call and put options:“In a stable interest rate environment the manager is not concerned about interest rates increasing which would...
View ArticleGIPS: Consolidated List of Performance Presentation: Required vs. Recommended
Does anyone have a simplied list of things required versus recommended in the performance Presentation? Every single question I come across where they ask which is required vs. recommended I can’t get...
View ArticleWHAT DO YOU KNOW THAT NOBODY ELSE DOES???!!!
Not exactly, but the idea is topost 3-5 quick facts that you think others might have missed. They can be from anywhere as long as they are relavent to the exam. Let’s conquer this together!SS3:...
View ArticleVert frustrated with morning papers/essay questions
Most of the time I don’t know what I’m doing, or what to write…I have been so used to multiple choices and it’s hard to put things together in my head and write it down. I only went through the...
View ArticleUsing country beta in breakeven analysis on bonds
It seems to me when you use the longer of the 2 country’s duration in the breakeven analysis for a yield difference that you should take into account the country beta. For instance, if country 1 has a...
View Article2013 Morning Q1C - liquidity requirement
Why isn’t the taxes due immediately on the gain of the sale of the business is not liquidity requiremnet?
View Articleneed some suggestions please..
hopefully i am not the only one with this mental deficiency…i review a section/study session, feel i know the material well, even the minutae. score in the 80s or 90s in the EOCs and doing that...
View ArticleWhat's your approach after a mock
It’s a saturday, you just got done with a mock. You walk through all the questions and learn from your mistakes. What does everyone do after this?
View ArticleAllocating shareholder capital to pension plans...
…not relevant this year? LOS 17 in 2013.
View ArticleSpread Duration
Can someone going through the Fixed Income section please explain the Zero Volatility spread and option-adjusted spread in level 3 context?Schweser isn’t quite clear.. and kind of just rushes through...
View ArticleHow to solve corner portfolio problems
Good walkthrough article of the theory behind corner portfolios and the 4 step calculation you have to make to get full points on the exam. Full article here
View ArticleWhere does the cash for hedging come from (and effective beta)?
I know this may be a silly question, but when doing these calculations I’m just a little confused. If we own a $20mn portfolio and want to hedge by buying $1mn in NP of contrats, is that just an...
View ArticleIncrease one year return
CFAI2012 past paper says: Determine the amount Brown needs to borrow to increase the one-year return from 3.20% to 4.40%, assuming all invested funds earn 3.20%. Show your calculations.Answer gives:...
View Articledelta hedge
Q: Suppose a manager has position in fixed rate bonds and wants to hedge this exposue. OTM Calls each cover 100000 par value of bonds, have delta of 0.4. So would you buy/ sell and cal # of contracts....
View ArticleChange in delta
Q: When the price of underlying bond increases by 1%, due to a yield curve shift, call hedge should be decreased or incresed?
View ArticleStressed and venting...
I tried to stay away, but think I’ve hit the breaking point and you know what they say, misery loves company…I just feel like no matter how hard I’m trying, it’s just not enough. I started early and...
View ArticleCapital market expectations - confused about interest rate effects (capital...
Below text is taken from CFAI.Long-term capital flows may have the effect of reversing the usual relationship between short-term interest rates and the currency. This is explained by the fact that a...
View ArticleQuestion on Schweser practice exam #1, afternoon (MCQ) question
Hello - I have a question on #34, afternoon practice exam #1. According to the solution, the Euro is expected to depreciate by 0.2% (and will trade at a forward discount). However, given that the Euro...
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