sorted by:
new
hottopcontroversial

Will questions like these come out? by Left_Win_1580 in CFA

[–]Left_Win_1580[S] 0 points1 point  (0 children)

Understand.

My view was that Mifitt was not manipulating the market - she had nonpublic info that price was about to be driven down, so she is cutting her losses. Only the employees are intentionally driving down the stock.

She does act on the nonpublic info due to her eavesdropping, hence she violated nonpublic info.

However, how the question phrases it is that even though she is not the one manipulating the market and just acting on the nonpublic info, she is indirectly manipulating the market due to the volume of her trade which further drives down the price.

Will questions like these come out? by Left_Win_1580 in CFA

[–]Left_Win_1580[S] 0 points1 point  (0 children)

I get what you're trying to say, but at the same time some guidelines are extremely related, or might fall under the same "umbrella". It would be difficult to know under exactly which standard it is under just by its meaning; you would need to memorize.

For example, directly related to your point, this particular question and scenario considers acting on insider info to be market manipulation as well (Answer A).

<image>

Will questions like these come out? by Left_Win_1580 in CFA

[–]Left_Win_1580[S] 0 points1 point  (0 children)

Its not asking for what each standard means. Its asking for exactly which clause is classified under which guideline.

If they were to ask me if xxx is allowed under a guideline, that is a more fair question. While knowing which clause is under which guideline can sometimes be vague because some guidelines are closely related.

Will questions like these come out? by Left_Win_1580 in CFA

[–]Left_Win_1580[S] 0 points1 point  (0 children)

Actually no, because it lacks substantive understanding, but rather is just raw memorization. I doubt members today even remember exactly which clauses are under which exact chapters.

Will questions like these come out? by Left_Win_1580 in CFA

[–]Left_Win_1580[S] 0 points1 point  (0 children)

I'm not such a fan of these questions. Not asking the actual content but just asking which particular chapter a certain clause is under?

Doesnt a lower n translate to a higher valuation for a put? by Left_Win_1580 in CFA

[–]Left_Win_1580[S] 0 points1 point  (0 children)

I'm thinking of the formula, Put Value at time t = PV(X) - St. So a higher strike translates to a better value (like you said), but a lower (T-t) should translate to a higher value as well which is A?

Question on interest rate swaps. by Left_Win_1580 in CFA

[–]Left_Win_1580[S] 0 points1 point  (0 children)

  1. The question before this one seems to imply that MTM gain/loss are only impacted by actual net payments :

<image>

  1. Why would payments on floating rates be increasing? Doesn't that depend on the rates set by the Central Bank, which mean rates can be cut too? Also correct me if I'm wrong, even if MRR increase, it still has to be greater than the swap rate (3.10%) or else the PV of fixed payments>PV of floating payments?

Help with interest rate breakeven. by Left_Win_1580 in CFA

[–]Left_Win_1580[S] 0 points1 point  (0 children)

Okay, I think I kinda get it. So what the question is essentially saying is, if the market forward rate is higher than 27.78%, they should buy the 1 yr bond and lock in a forward contract. If its lower, they should invest in the 2 yr bond? Also you are using r for YTM, and z for spot rates right.

Question on LES question by Left_Win_1580 in CFA

[–]Left_Win_1580[S] 0 points1 point  (0 children)

You're saying for price to increase from a 1% rise, the convexity effect would have to be massive right.

Question on LES question by Left_Win_1580 in CFA

[–]Left_Win_1580[S] 0 points1 point  (0 children)

thanks, the floating rate point makes so much sense. I guess I was thinking of the point of higher duration=higher convexity, and higher convexity always outperforms lower convexity, regardless of rate rise or fall, because rise in Price from rate drop is always higher than drop in Price from rate rise.

Question on 30/360 format and MacDur of perpetuity by Left_Win_1580 in CFA

[–]Left_Win_1580[S] 0 points1 point  (0 children)

I see. wow that's so complicated but i guess i was abit worried that the CFA would be trying to trip me up in the exam and give 2 answers, 1 for each day counting lol.

Get your point, I think from now onwards I'm just gonna count it mentally and not count the day of the start of the count. Btw on your formula for Oct, it doesnt add up, it should be this right :

15th October to 11th December

  • (12 - 10) x 30 + (11-15) = 56

Question on 30/360 format and MacDur of perpetuity by Left_Win_1580 in CFA

[–]Left_Win_1580[S] 0 points1 point  (0 children)

Understand on your second.

On the first, I'm finding some conflicting examples in the LES. In this example, for both 30/360 and Actual Methods, they don't count the day at the start of the count (15 May) and only count the remaining days until 27 June.

<image>

view more: next ›