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in reply to: Test Prep and Test Day practical tips #73194in reply to: Most Difficult topic in Level I #73602in reply to: CFA Level 2 2014 Ebook #74740in reply to: Level 1 – Exam Experience #73601Up::4
Hey,
You all seemed like yall had little sleep the night before. I couldn’t sleep too well myself. For me, I got a bit flustered during the afternoon session (I took Lvl 1 btw) and found it much more difficult than the morning session
in reply to: QM – Answer Explanation Re Time Value #73669in reply to: Covered Interest Rate Parity Question #76078in reply to: Inventory/Sales Ratio #72866in reply to: Change in basis points clarification… #73156Up::2Hey Lulu123,
The first question seems to be erroneous because 100bps is 1% or 0.01… so you’re correct in that they didn’t do the same conversion. May you post the question so I can see and attempt to interpret what was done?
Graeme
in reply to: Test Prep and Test Day practical tips #73179Up::2Does anyone know if we can write on the question paper (use it as scrap paper for calculations) during the exam?
in reply to: Valuing a preferred stock #73211Up::1Yes….. They are treated like a perpetuity since they have no maturity… Also, unlike common shareholders, preferred shareholders receive fixed payments that do not generally grow.
in reply to: Change in basis points clarification… #73163Up::0Yes that is correct Lulu123….you’re duration calculation is also correct….16.13%*1.0*2,000,000=322,600 … since the example didn’t specify the direction of the rate change and all are negative… the answer is B … the 10bps change had to be used in the denominator of your duration calculation since that was the change used to compute the prices in the numerator….. the 100bps change came into play when you were estimating the change in market value
10bps (or 0.1%) was the hypothetical change used to calculate the duration
100bps (or 1.0%)was the actual change used to estimate the change in the value of the portfolio -
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