@padniaki
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Up6
@MattJuniper, that is BY FAR the best explanation I have seen on this topic. Thank you so much for taking the time to do that. I still have a couple minor questions, but I will run through a couple practice problems today and then post if I am still having trouble.
Thanks again!
Up5@sophie I usually use the app to review in those valuable spare moments when I don’t have my study materials with me (riding in the car, waiting in line at the grocery store, etc.)
The app doesn’t have many formulas, it’s mostly focused on list-based stuff (e.g., list the four axioms of utility theory; what are the government policies that promote economic growth).
Up5I do neither of those. I wake up at 1 pm in the afternoon after sleeping at 4 am everyday. So no question of breakfast. And is excercise really necessary? I am 6 feet tall and weigh only 60 kgs lol.
I would strongly recommend trying to adjust your sleep schedule over the next month so exam day doesn’t completely shock your system and impair your performance.
For what it’s worth, I find my after-workout studying to be much more productive than any other studying time. I think you’d benefit more than you think from exercising. And yes, I understand the frustration of being way too skinny, as I too struggle to put on any weight/muscle. Go do some squats and drink a few galllons of milk! 😉
Up5@Sophie, I just noticed these posts…absolutely outstanding. Just came on here to ask some IPS questions, and your post answered most of them. Seriously, so helpful, to the point, and accurate. Thank you.
With that said, I still do have a question. I seem to be struggling on “time horizon.” My initial understanding was that the stage of the time horizon changes any time there is a significant change in circumstances. For instance, in question 1 in the CFA 2008 AM exam, I put something to the effect of:
“They have a long, multi-stage horizon. The first stage spans from now until their children enter college (in about 14 years), the next stage is while their kids are in college, the third stage is when their kids are out of college and no longer dependent on them, and the final stage is retirement.”
However, the answer given by CFA was simply:
“The Carvalhos have a long-term multi-stage time horizon. In the short term,
they must pay living expenses and provide a home for their family. They
may also have to pay tuition for their children. Their second stage is
retirement, thirty years from now.”How do I know what is significant enough to constitute a stage of the time horizon, other than retirement?
Up5Passed!
AM – Constructed Response
Q# Topic Max Pts <=50% 51%-70% >70%
1 Portfolio Management – Individual 20 – – *
2 Portfolio Management – Individual 15 * – –
3 Portfolio Management – Individual 16 – – *
4 Equity Investments 17 – – *
5 Economics 20 – – *
6 Portfolio Management – Institutional 18 * – –
7 Portfolio Management – Institutional 14 – * –
8 Fixed Income Investments 17 * – –
9 Fixed Income Investments 9 * – –
10 Portfolio Management – Risk Management 18 – * –
11 Portfolio Management – Performance Eval. 16 – * –
PM – Item Set
Q# Topic Max Pts <=50% 51%-70% >70%
– Alternative Investments 36 – – *
– Economics 18 – – *
– Equity Investments 18 – – *
– Ethical & Professional Standards 36 – – *
– Fixed Income Investments 18 – * –
– Portfolio Management 18 – – *
– Portfolio Management – Asset Allocation 18 – – *
– Portfolio Management – Risk Management 18 – – *Up4Actually, the entire section on Behavioural Finance is largely a waste. I mean, yes, Traditional finance people are objectively insane because their core beliefs are build on a foundation of assumptions that have no basis in reality. So I want to disagree with them, I really do. And Behavioural finance might have started out with good intentions of pointing out the ridiculous flaws in Traditional finance, but now it’s just a competition to see what insane “bias” you can attach your name to and use as the basis for your entire academic career.
I had forgotten how angry this stuff made me when I originally covered it. Sure, it probably won’t show up on the exam, but I’m angry at CFAI for even including it in the curriculum.
I am actually extremely glad that they covered behavioral finance, as I feel it is a very relevant topic. I understand your frustration, but I think behavioral finance cannot be ignored. For a more practical treatment, check out Jason Zweig’s book “Your Money and Your Brain.” Outstanding book.
Up4And yeah, @mattjuniper, that reading is a mess. Here’s what I did: pick an in-chapter blue box problem (one that’s sufficiently comprehensive) and work through it, looking back to the formulas and stuff. As you go, write down the steps you used to get through it. This will make it clearer in your head, because you have to concisely describe the steps that you are using. After that, you don’t need to understand it as much as you just have to memorize the “steps to calculate” that you just created.
Up4I’m in a customer service job, so I quite often have an extra 2-5 minutes between customers where I can’t get any real work done, so I use studying to kill the time. I never whip out the books, though. I either practice writing down formulas or go on the forums or something.
Up4The only time I would borrow someone else’s mnemonic is when you have one or two things you just can’t seem to remember. I good mnemonic can stick for months, and may save you tons of time that you would have otherwise had to spend using repetition.
I swear by mnemonics and memory palaces, and they have been a big part of my studying. Of course, you have to hammer it in using practice problems, but memory palaces and mnemonics are outstanding “triggers” to help me remember things.
Up4Punch Drunk Love.
Just kidding, that one might tire your brain out more than reading CFA books.
How about Miracle?
Up4Sounds simple, but on problems in FRA and Equity, when they give you some kind of financial statement, make sure you look at the years at the top of the column first. There is no absolute convention as to whether to go left-to-right with the most recent year or right-to-left. The last thing you want to do is get finished with the problem, draw a conclusion about how the company’s current financial situation is worse because current ratio has declined and debt ratio has gone up, only to realize that the opposite is true because you didn’t confirm the years on the top to see which direction the table goes.
Up4This is a test.
Up4Ok, Forum question…how can I make your post the “Answer” to the thread?
Up4@Diya, I believe that post-exam daze is called “exuberance”…I don’t know of this “trauma” you speak of…
Up4Are you kidding @AjFinance? Mechanical pencils, 100%.
Up4Additional question related to what I posted above: Does retirement consist of one stage or two? Because in one of the readings it discusses the lifecycle stages (can’t remember the first stage, but the others are accumulation, maintenance, and distribution), in which the latter two both take place in retirement. Maintenance is the majority of retirement (I think) and distribution is when you actually start distributing your net worth. Wouldn’t this be two stages? Or am I reading too much into it?
Up4Don’t know the answer to the first question, but for your calculator question: I learned plenty of good info from the actual manual (you know, the boring one that comes with the calculator that no one ever reads?).
http://education.ti.com/guidebooks/financial/baiiplus/BAIIPLUSGuidebook_EN.pdf
Up3Wow, this is unbelievable! I already made my own notes, but there are a few readings I missed. So I will definitely be using this. Thanks!
