@jak5189
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Up6
Discontinued Operations – Under U.S. GAAP, you report it as “extraordinary net of tax”. I believe it should be reported below Income from continuing operations but above Extraordinary Items.
Up5I think studying the material vigorously is a must for passing the exam. Can’t really think of anything else.
Up5I would recommend Elan Guides, their mock exams are tough as heck and are a lot similar to what I saw on the actual exam.
Up4I’m curious why you didn’t include Portfolio Management in the list of topics to skip. It comprises less than 10% of the exam.
Up4The best way to understand this is that EPS is largely affected by a company’s capital structure, which is more or less the composition of how a company finances its operations, or in other words…its financial risk. Net Income, although affected by many machinations and non-operating events, may not be fully affected by the capital structure of the company. I realize that my view on why Net Income might be a stretch so I would appreciate anyone else adding to my commentary.
Up4One more thing to add – if the question stem would say something like, “the percentage returns for a stock since inception…” then I believe one should assume the data set is a population. And my logic is the “since inception” part of the sentence; this implies that the data set is inclusive of ALL the years. I have seen this sort of example on a practice exam and my logic worked fine there.
Up3Yea I am not following the solution either
Up3Remember revenue is recognized if it is realizable and earned. In this case, the company would receive the cash and, since it did not provide the services or deliver the goods, record an offsetting balance sheet entry, which would be a liability in this scenario. Once the company actually delivers the good or service, it will then reverse that liability and record a revenue.
Up3I have also noticed that KS’s material is not always up to par. I started using Elan Guides for CFA Level 1 questions and I feel that they’re on par with the official questions. I feel like I was shirked with the Qbank. Elan’s questions are a lot more in depth and comprehensive.
Up3For a Putable bond, the yield will be smaller as investors will value it more; so when you take away the put the OAS will have to be larger than the z-spread. For a Callable bond, the yield will be larger as investors will not value it more; so when you take away the Call the z-spread will be larger than the OAS. Hopefully that helps conceptualize the reasoning behind the spread differences.
Up3this stumped me as well and i decided to go with the assumption that this is a population data set. “the percentage returns for a stock for a 5 year period…” is very similar language to a CFAI mock exam question that I encountered, and the correct answer was based on the logic that it is a sample data set. My view here is that this data set would be considered a sample set due to the language I previously noted.
Up3@jmsatchwell, I feel the same as you. I would come across a question that I had to think really hard and either got it (or so I think) or just guessed and moved on; then I would run into like five really easy questions. I am still wrapping my head on some those questions I found difficult. My only source of comfort is that those easy questions = easy points.
Up3Although I will know for sure come Jan regarding my Dec 2014 exam I can say with confidence that Elan Guides prepped me very well. I was thoroughly impressed with the quality of their content and the difficulty of their practice exams. I 100% recommend them.
Up3>70% on everything except Derivatives…I bombed that with <=50%. I am surprised I did much better in FI and Quant than I originally felt coming out of the exam.
Up3I know myself…I will not be prepared for Level II this June. I am gonna shoot for June 2016. In the meantime I plan on studying for the GMAT to keep my options open…and to keep my brain functioning 🙂
Up2If the question asked for F(12) then you can answer it by thinking of it as P(x<=12), or, 12*(1/20).
Up2@Simply_complex2, if I am understanding an increase in market interest rates will cause the coupon rate to adjust up to the new market rate to compensate investors for the depreciation in the price of the bond? The compensation is in the form of a higher reinvestment rate? And for the issuer, the decrease in interest rates causes the coupon rate to adjust downward, which allows the issuer to pay out less to the investor. Is that the logic??
Up2@aylouis13, I used cost of equity as well and I believe that is the correct rate of return. In my opinion, the WACC should be used for FCFF or FCFE. Since we’re talking about dividends, it should be cost of equity as the rate of return.
Up2Yea, I didn’t see this in the Fixed Income section. I am trying to search for it in Econ as I think it might be there.
Up2The concourse where we stacked our coats and bags turned into mayhem during the break and after the exam ended. I had one person yell me to move! Other than that, no real crazy things in my hall. Just a lot of people who looked like they got hit by a train while waiting for the second session to start. I also noticed quite a few people strolling in very late after the afternoon portion had begun and they prob had an hr to finish it off. No way they finished it.
