› nimeshgala

nimeshgala

Forum Replies Created

Viewing 3 posts - 1 through 3 (of 3 total)
  • Author
    Posts
  • in reply to: Doubt in 2009 paper Q1A #73389
    Avatar of nimeshgalanimeshgala
    Participant
      23 Apr 2017 at 7:28 pm
      Up
      4
      ::

      Found the elaborate explanation, http://www.analystforum.com/forum/s/cfa-forums/cfa-level-iii-forum/91318764

      in reply to: Doubt in 2009 paper Q1A #73387
      Avatar of nimeshgalanimeshgala
      Participant
        23 Apr 2017 at 7:24 pm
        Up
        3
        ::

        In the 2009 exam question, it seems that the account in which the investments are held is a deferred tax account and hence only withdrawals are taxed at 20%, therefore the unusual way of doing the pretax first and then adding the inflation. explained here http://www.finquiz.com/downloads/l3ss4los14.pdf
        Funny, I was searching for the same reasoning yesterday and I did find a elaborate explanation on analystforums.com will try to find the link in my browser history.

        in reply to: Doubt in 2009 paper Q1A #73388
        Avatar of nimeshgalanimeshgala
        Participant
          23 Apr 2017 at 7:27 pm
          Up
          3
          ::

          To answer @lakshya25’s question about calculating returns geometrically, the reasoning is, since endowments’ and foundations’ Time Horizon is perpetual in nature, the difference between additive method and geometric method will cause a huge gap down the years.

          I know they are not going to exactly earn the same return every year, but lets say they have a “Immunization God” who immunizes their portfolio and provides them with the exact same return every year, the difference in both the methods will matter.

        • Author
          Posts
        Viewing 3 posts - 1 through 3 (of 3 total)