lakshya25

lakshya25

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  • lakshya25 1lakshya25
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    Didnt make it (band 9)…Down but not out.. Many Congrats @matty and @sankrutimehta πŸ˜€ , 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.. :p

    lakshya25 1lakshya25
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    In 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?

    lakshya25 1lakshya25
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    Thanks @Zee.

    lakshya25 1lakshya25
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    @Zee, Thanks for attaching the image here πŸ™‚ .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.

    lakshya25 1lakshya25
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    Sorry,didnt work..Have provided the img url above

    lakshya25 1lakshya25
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    Trying with a different browser..

    lakshya25 7

    lakshya25 1lakshya25
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    @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.

    lakshya25 1lakshya25
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    We could use some. πŸ™‚

    lakshya25 1lakshya25
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    Yea.Makes sense.Thanks a lot @Zee and @Sophie πŸ™‚

    lakshya25 1lakshya25
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    I tried attaching the image here but an error occured..

    imgur.com/j8kDIPy

    lakshya25 1lakshya25
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    But @Zee , Its clearly written in the book (Pg#116) When the investment is liquidated,spot rate is 1.2760

    lakshya25 1lakshya25
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    @jimmyg, I think the futures contract matures on day 90 because it’s mentioned that at the time hedge is lifted, the spot rate is 1.2760 which is equal to the spot value on the day the investment was liquidated.i.e. investment liquidation date and the maturity date are the same…Moreover why would he sell the futures contract on day 90 if it is a 90 day investment…he must have sold it on the day he invests & pays for it on day 90…

    lakshya25 1lakshya25
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    (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?

    lakshya25 1lakshya25
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    What 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

    lakshya25 1lakshya25
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    I 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…

    lakshya25 1lakshya25
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    @Sophie, My state is like that of a trekker who has just got to know about the actual height of mountain,The problem is that just climbing up isnt enough,you have to get down to the starting point and then start the trek again !! These summaries help us find the way πŸ™‚

    lakshya25 1lakshya25
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    Should I read GIPS from CFAI text or Schweser ?

    lakshya25 1lakshya25
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    @Sophie,I have done the Schweser and curriculum EOC questions but I had to see the answers for everything that was asked and while checking my answers I suffer from confirmation and hindsight biases as well ! πŸ™

    lakshya25 1lakshya25
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    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.

    lakshya25 1lakshya25
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    Hi @Marc ! Welcome aboard ! I’ll suggest you to read Schweser notes and practice the Bluebox examples and the EOC questions from the curriculum textbook if you wanna finish the material sooner.

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