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Fixed Income: Calculating Duration with Leverage
Have a doubt in the below question Bond A Bond B Bond C Par Value $50,000 $60,000 $40,000 Market Value $52,000 $61,000 $40,000 Effective Duration 8.2 6.8 5Richards wishes to investigate the use of...
View ArticleReading 14: Lifetime Financial Advice, CFA EOC Q3, p424
Q: "Smith is the financial advisor to Steve Hernandez and Michael Lee. Hernandez is a 35-year old physician with an annual income of $200,000 and financial wealth of $250,000. Hernandez’s financial...
View ArticleHow do you tackle GIPS?
There seem to be so many standards in GIPS, some are very similar and the only difference is just must vs should and with all the date differences (e.g. prior to Jan 08, Jan 2010, Beginning of Jan...
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CFAI R27: Risk Management EOC Q16 (Natural Hedge)
Guys, I am only half getting this. Could you please explain to help me bed down the concept. I find the CFAI answers rather confusing. Thanks!!!Question:Ricardo Colón, an analyst in the investment...
View Article[CFAI EOC - SS10 R22] Question 27 possible error with contingent claim risk?
Hi guys @Jwa @RaviVooda @AjFinance @Alta12 hope your studies been going well, I need your views on this very question.Text:"In addition to his CIO responsibilities, Choo is also responsible for...
View ArticleFoundation/Endowment funding operations
The more responsibility a foundation or endowment has for funding the ongoing operations of an entity the lower the risk tolerance for the foundation or endowment. Has anyone found a % of funding...
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Individual Investors-Taxes
Which of the following moves by a government would most likely lead to the government taking on more investment risk? A)Moving from a heavy dividend tax regime to a common progressive tax regime....
View ArticleReading 23 - Portable Alpha?
Can you please help me with the answer provided to Question 7 in the EOC problems for Reading 23 (CFAI textbook):Q. Simon Hayes …. expertise lies in building market-neutral long-short strategies using...
View ArticleBehavioral Finance: Difference between Representative Bias and HindSight bias
Please help me understand Representative bias and also the difference between Representative Bias and HindSight biasI am getting very confused in these 2 biases.@Alta12,@vincentt,@sophie,@jwa,@marc
View ArticleHow old is considered old?
I might have missed something here, I always thought 10 years isn't long based on what I understand from the syllabus. Also, I thought a retired person should have a shorter time horizon, shouldn't...
View ArticleTopic by Weightings
Topic Area Level III Ethical and Professional Standards (total) 10%Asset Classes (total) 35-45%Alternative Investments 5-15%Derivatives 5-15%Equity Investments 5-15%Fixed Income 10-20%Portfolio...
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[CFAI EOC - SS10 R22] Spread widening
Question 22. Based on Exhibit 1, for investors that purchased 10-year U.S. notes, the spread widening in basis points that will wipe out the additional yield gained for a quarter is closest to:A. 6.03...
View ArticlePainful hand and shoulder
This morning I did the 2013 Level III AM paper in a timed situation to see if I would be able to write so much and how long it took me to answer each question. Oof, now my hand hurts dreadfully and my...
View ArticleCFAI Mock Exams
I had a question about the CFAI exams, which CFAI have annoyingly made difficult to print out and do on paper. If I do them on-line, then is it possible to pause after an hour, say, and come back to it...
View Article[Schweser] Exam 1 Morning Q7 Aii
Summary of the vignette:Rine Ruby has core capital of £1,000,000 and excess capital to be £4,000,000. He would like to provide each of his children a relatively equal share of his accumulated wealth....
View ArticleREADING 15: Managing Institutional Investor Portfolios - Endowment (Help...
Information given in the School Endowment example:1. Annual operating budget of approx. $10m (90% goes to salaries and benefits for teachers and a small admin staff.2. The school has no debt3. The...
View Article2010 Level III AM Exam
I've been going through the previous years' exams and I've got a couple of questions about the guideline answers on the 2010 AM exam.Q1 A(i) asks what are the liquidity constraints in Elisa Lima's...
View ArticleCFAI Practice Exam
For level 1 and 2, there was one full-length practice exam on the CFAI web site that you could print out and take for free. I know there are three past morning sections you can print out, but is there...
View ArticleSwaps - Is there a LOS on Structured notes?
Two working examples in Reading 31 in CFAI text on leveraged floater and inverse floater. I cannot find the LOS on this. Any idea?
View Article2012 CFAI exam AM - Q7E (Dynamic hedging vs options hedging for interest rate...
@vincentt @ravivooda @Sophie Given: A portfolio of government bonds and MBS securities with the same duration. PM forecast interest rate volatility will rise significantly and yield curve will shift...
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