IPS - Risk tolerance (LOAD your BULLETS)
This should be the most highly testable question for IPS.Below are some bullets you can use and please remember to load it and shoot it on exam day. Welcome to contribute more bullets to below.Q1B...
View ArticleSchweser Vol 1 Exam 2 - Implementation Shortfall
Guys,In 16-30f the example has us add Missed, Explicit, Delay, and Realized/Price implact together to get I/S.On the exam you can’t use this method, despite being given all the info. Why is this?
View Articlehedging currency exposure using Forwards - HELP PLEASE!
i thought i had this under control, but i guess not….can someone please lay out when/why/how you would hedge currency exposure using forwards. i understand that Fwd premium/discount is based on the...
View ArticleDelta hedge and risk free
Regarding a delta hedge, text says: because we are hedged, the portfolio should be earning a risk-free rate of return based on a gain in value of the short call position and the fall in value of the...
View ArticleDoes CFAI 2015 Mock repeat practice Qs?
If I remember correctly, last year CFAI’s Mock was a regurgistation of the practice q’s listed above. Before I dive into those, does anyone know if they are different questions in CFAI 2015 mock vs....
View Article2015 mock morning session/ question 27
My understanding of the text is that he wants exposure to S&P and TSX with a portable alfa strategy with futures.Why would he shed exposure to TSX index and short TSX futures? Shouldnt he go long...
View ArticleMinimum Variance Hedge Ratio: Formula?
Is this right? H = correlation (Rdc,Rfx) * [St. Dev (Rdc) / St. Dev (RFx)]H = Cov (Rdc, Rfx) / Var(Rfx) * [St. Dev (Rdc) / St. Dev (RFx)]—————————————–I feel like i’m picking out the bones of a fish...
View ArticleCollar - concentrated stock (R30, BB3)
Why collar is not suitalbe for manaing concentrated position? The solution shows “The zero-premium collar would hedge the value of WEI position but would not diversify Lane’s equity position. Also, the...
View ArticleConfused About Similar Foreign Asset Return Formulas
So we have:1) Domestic Return=Return on Foreign Asset +Return on FX+(Return Foreign)*(Return FX)and2) Domestic Return on Foreign Bond=Return in Local Currency+Currency ReturnwhereCurrency...
View ArticleUtility adjusted return, Different formula in asset allocation and Equity,...
in Asset allocation we multiply risk aversion score and variance with 0.005in equity we don’t multiply with 0.005.is equity one incorrect? Equation 2 in reading 24Thanks,
View ArticleLife insurance - Long or short term bond portfolio
Portfolio should haveLong term bond becasue of long term horizonor Short term bond becasue of the timing of claim is uncertain?
View ArticleStable Components in Asset Allocation Process
Prediction ProcedureRisk ToleranceOptimizerWhat do they mean by ‘Prediction Procedure’? Book says “prediction procedure represents the investor’s perception of best process for developing capital...
View ArticleAnswering questions on derivatives
I am having serious issues in memorising the formulas as given in CFAI, but find the graphical approach a lot more palatable and can get to answers with more confidence using the graphs.Would CFAI...
View Articleyield beta and conversion factor
When do we ignore the figures while calculating number of contracts. I saw a question that didn’t use yield beta even though CF was used. The question gave duration of Future contract
View ArticleBinary put option of a bond
A bond selling above par, I assumed the strike was the current market price but answer used the par value. Is this correct
View ArticleHow is this ethics question right?
I hate Schweser with a passion more and more.Here is text form the passage:Prior to leaving his current employer, XX, Larson contacts 25 individuals from an affinity prospect list by calling them,...
View Articlewhy lower interest rate will increase the dollar safety margin of contingent...
This is an EOC quetion of reading 22. I thought the answer should be the other way around. When interest rate going down, the prevailing return will also go down, will lead to a lower discount rate....
View Articleworried/scared---- ips quesiton
I can’t remember where…. but for individual IPS questions… Are there situations when they tell you a holding as a cost basis of XX and then you need to figure out what the net amount will be in...
View ArticleHedge fund index
Extract from 2006 AM exam. Is this the right way to manage hedge fund index?- When a new manager is added to the index, the index administrator adds the manager’s entire return history to the index.-...
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