@lakshya25
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Up4
In response to
why not you have a go at explaining the differences in the comments below?
It’s all in the name ! Defined Benefit – Plan sponsor’s liability is in terms of the benefits.(a retirement income based on certain criteria,may adjust for inflation,pay structure etc.) while Defined Contribution– Only the contribution is promised,no financial liability of the plan sponsor.DC Plans are of two types-1.Sponsor Directed-Almost same as DB Plan & 2.Participant Directed– Most common DC plan.
Key differences between DB & DC plans :–>Risk of investing
DC Plan – Borne by the plan participants (employees).DB PlanEmployer bears this risk but employees face the risk of early termination of the plan(by the employer)
–>Record Keeping& Investment Returns
DC Plan – Individual-account basis.This induces portability DB Plan-Firm level.Up4Should I read GIPS from CFAI text or Schweser ?
Up4What do you do now @lakshya25 and why did you choose to take CFA then?
Fresh MBA grad,going to join one of theBig4 as analyst.I decided to take CFA because I am new to the world of finance and wanted to expand my horizon,to show that I am really interested in finance and all that rot ! :p
Up4In the same question, CFAI solution finds the pre tax return requirement and then adds the inflation rate,which is contrary to the common way of adding inflation first and then finding the pre tax value.How can we decide which approach is required?
Up3Thanks for the link @AjFinance,but I am seeking some guidance particularly related to IPS questions
Up3@sankrutimehta, If you are making conceptual mistakes checking out Fixed income videos of L1&L2 may help.I havent done a single mock yet,so cant say much.
Up3Didnt make it (band 9)…Down but not out.. Many Congrats @matty and @sankrutimehta 😀 , You guys deserve it…Those who couldnot sail through this time…Lets take this monster down next year !! U know u **cked it up somehow ! Lets do it the right way next time !
Thank you @Sophie,@zee,@christie… You guys and 300 hours rock. Will bug you soon.. :pUp2(Taking Euro =E)
A person in US invests 1m Euro at Spot rate-$1.2888/E . In 90 days,investment grows to E1050000,spot rate – 1.2760$/E.He decides to hedge 1m E by selling 1m E in futures at 1.2891$/E . At the time investment is liquidated and hedge is lifted.futures exchange rate – 1.2763$/E .The Question requires us to find the total return on hedged position.My doubt is – If the futures price and the spot price converge on the maturity date,why is there a difference between the spot rate (1.2760$/E) and futures price (1.2763$/E) on the 90th day?
Up2We could use some. 🙂
Up1Can’t thank you enough @Sophie 🙂 .. Actually I had not practiced any questions on IPS apart from the Schweser EOC questions.Was looking for a kinda framework which could give me the confidence to tackle IPS questions and your post precisely did that.Will get back with specific questions when I’ve practiced enough problems… Thanks a lot once again
Up1@Zee, Thanks for attaching the image here 🙂 .Yep,Answer is B.Can u pls explain ? I was going for A,thinking that since Fwd price is inversely related to the convenience yield(c),including high c is making the fwd price appear lower..Whats the flaw in my logic?
@Sophie,I did copy the image url when prompted..May be some issue with my browser..Thanks anyway.Up0I am talking about the total return calcuation questions ( hedged ) in which we calculate the translation loss/gain and then the return on futures contract.I am confused because if the spot price and futures price converge, why are they expecting us to find the returns in two parts,shouldnt the Spot price equate future price and we directly compare the futures contract price to the spot price…
