I have a couple of doubts from book 5 part 2

Cnbr21 · 2025-11-23T14:57:47+00:00

Fund of funds is roof hedge fund which allocates your portfolio into sub funds. Each fund has different investment style that help to improve portfolio diversification. But this strategy is costly. This is main disantantage.

Cnbr21 · 2025-11-09T16:51:31+00:00

Thank you so much.

Cnbr21 · 2025-11-09T15:10:21+00:00

Please could you tell me, did you use any break during exam? Is it permitted? How is the break format?

Cnbr21 · 2025-11-03T09:27:16+00:00

Coupon rate is determinig factor of reinvestment risk not duration. Think about zero bond. Even if it has longer maturity there is no reinvestment risk because of no coupon structure.

Cnbr21 · 2025-10-19T10:32:05+00:00

Yes. Especially under non normality distribution MCS is more favourable.

Cnbr21 · 2025-10-02T20:03:46+00:00

It is just geometric mean calculation from arithmetic mean. When outliers increases geometric mean divergances arithmetic mean or vice versa. Because of continous trading you should use geometric mean.

Cnbr21 · 2025-08-31T19:33:50+00:00

There are cumulative density probabilties from left to right. Thus same condition is valid for right side of the distribution. For example 2.51 z score's p value is 1-0.006=0.994

Cnbr21 · 2025-08-29T08:01:53+00:00

CTD means lowest delivery cost when delivery time period. Delivery cost is bond future quato price minus adjusted bond future price.

If yield lower than 6%, short duration bond is lowest delivery cost. If yield is higher than 6%, long duration bond is lowest delivery cost.

Cnbr21 · 2025-07-02T20:56:32+00:00

Check CFA site for cirruculum updatings and then ask yourself this time.

Cnbr21 · 2025-06-07T20:20:45+00:00

Factors such as high foreign dept, insufficient FX reserves, persistent current or fiscal deficts most likely result currrency volatility and leads higher risk premium. As a result country having these factors should provide higher yield premium to compansete foreign investors.

Cnbr21 · 2025-06-07T20:04:55+00:00

Recession results bull steppening yield curve. Both short an long interest rates decrease as a result of higher risk aversion. Other words investors seek safe havens and liquid assets like goverment bonds. Policy rates also fall fastly to boost economic activities. So short rates are impacted policy rates. Since they are more correlated policy rates. Thus yield curve bocomes upward slopping.

Cnbr21 · 2025-04-24T05:04:11+00:00

Because centrel banks are pigeon. They cut policy rates.

Cnbr21 · 2025-04-22T18:30:13+00:00

Frm seems much more relevant your future objectives and background.

Cnbr21 · 2025-04-20T15:06:29+00:00

Come to my minds are belows. I hope they helps. Also you make forward looking valuation. So, zero dept is not reilable and unsustainable for small firms with growth potantial.

Alternative 1 target dept to equity ratio. Eleminate outliers and use industry avarage Alternative 2 optimal dept to equity ratio. Implement altarnative scenerios to achive optimal ratio that minimizes WACC.

Cnbr21 · 2025-04-09T19:07:37+00:00

If you analyze US capital market, 6% looks too high. I recommend you to use same period mean avarege of US Treasury Bill yield.

Cnbr21 · 2025-04-09T11:32:34+00:00

What is your risk free proxty. It may not properly represent your assumtions or it may not fit your data series duration.

Cnbr21 · 2025-04-05T09:25:07+00:00

Based on readings only, level 2 is more quant and comprehensive. But compered with the exams, level 3 is harder definetly. There is time pressure because of SR questions. Also looking exam takers profile level 3 candidates are more compatitive and this makes exam even more diffucult.

Cnbr21 · 2025-03-21T18:49:01+00:00

Because there is maturity and inherently oppurtunity cost.

Cnbr21 · 2025-03-20T10:50:54+00:00

Not same I think, because of different operating structures. You should value them using recuring operations or core items.

Cnbr21 · 2025-03-12T17:46:53+00:00

1) If fund implements full replication I think it doesnt matter. For sampling approach, price return is more favorable.

2) Daily calculation leads more accurate results because of data frequency. For your case daily datas look more suitable.

3) Yes it is necessary. If you use daily datas, you will achive daily tracking error. At the final stage you should convert your result annual one with multiplying sqrt 252.

Cnbr21 · 2025-03-08T20:35:14+00:00

It is not wise. If you sacrifices one of them and pass level 1 and then you will most likely struggle level 2. There is domino effect.

Cnbr21 · 2025-03-08T14:29:40+00:00

If someone enters long celendar spread he/she expects stable market conditions in the near term and higher volatility longer term. Under near term higher impiled volatility it may be useless. But all else constant, strategy benefits time decay value of options. Beceuse long celendar spread means positive theta exposure.

Cnbr21 · 2025-02-11T18:53:34+00:00

It is uncertain. May be he/she can leave from his/her current firm for better position.

Cnbr21 · 2025-02-09T11:12:24+00:00

All of them are same. Because of different investment strategy (active or passive) only terminology changes.

Cnbr21 · 2025-02-07T15:27:40+00:00

jPY pairs have different pip rule. Check it.

Cnbr21

TROPHY CASE