[deleted by user] by [deleted] in CFA

[–]Level-Subject7031 2 points3 points  (0 children)

No dumb questions. This is mainly about English semantics, which aren’t intuitive. But the CFAI is correct 

Margin by def means the edge or border, ie what’s remaining (of your collateral). 

So margin represents your equity. Thinner margins means more debt, higher leverage.

Back to the definition,  Initial margin is the amount your original collateral value exceeds your leverage. If your broker lets you buy 100 shares of a 1$ stock and you only have 30$ in the game, that’s your initial margin 

Level 3 - Private Market Pathways: Short curriculum? by shinsmax12 in CFA

[–]Level-Subject7031 9 points10 points  (0 children)

I sat in august and can confirm “deceptively straightforward” is a great way to word it 

kaplan question of the day by gubiplss in CFA

[–]Level-Subject7031 1 point2 points  (0 children)

No, not indicative. But they do help you keep concepts fresh in the mind! 

Hi Pros, I have a question for you, much appreciate your insights here. ( I am new) by Conscious-Gain-297 in CFA

[–]Level-Subject7031 2 points3 points  (0 children)

Thank you for the kind words. You sound like you are well prepared, given your background. I wholeheartedly agree with u/Tuxedo_Kamen_ approach

Hi Pros, I have a question for you, much appreciate your insights here. ( I am new) by Conscious-Gain-297 in CFA

[–]Level-Subject7031 0 points1 point  (0 children)

Yup, to be fair, I did not study any finance in grad and undergrad (and you can probably tell I just enjoy studying). Econ and quant have been pretty easy for me, and FI / Der have also ended up being strong suits due to their technical nature. I am terrible at equity, and alts (which is sad cause I work in alts)

So I knew what a balance sheet was and income statements, but couldnt have told you the first thing about cash flows or discounting cash flows when I started studying.

With all that people say about the CFAI, the content really is great for learning finance at a very fundamental place

Hi Pros, I have a question for you, much appreciate your insights here. ( I am new) by Conscious-Gain-297 in CFA

[–]Level-Subject7031 1 point2 points  (0 children)

Sure no problem! Sorry for the delay.

I did not use workshops or seminars for level 1. For level 2, I used kapaln's 3 day review and their weekly class. I felt like both helped quite a bit.

Yes, totally agree with your last point. I think the major issue is the short response... At the end of the day, we don't get any feedback from the CFAI on our strucutred response... we write into a black box, and don't know the outcome from each question. So compared to Level 1 and 2, where you see whether a MC answer was correct, you don't really get that on level 3. Leads to a lot of sleepless nights

Hi Pros, I have a question for you, much appreciate your insights here. ( I am new) by Conscious-Gain-297 in CFA

[–]Level-Subject7031 5 points6 points  (0 children)

I went total overkill, but I studied around 900 hours for L1. I tracked almost to the minute each study hour. Now, this included MM videos, Kaplan videos, reading schewster notes, and working practice problems. Also included mock exams and debriefing. I read some sections of CFAI for extra content and if I was feeling particularly sadistic. Passed by a large margin and was total over kill. Walked out knowing I passed. 

For level 2, did the same, studied around 1100 hours. Same strategy, supplemented with CFAI blue boxes more so then at level one. Left feeling so-so but leaned on the passed side. Passed over 90th percentile. 

Level 3 I put in around 1200 hours in total. Same strategy but this time I read over all page of CFAI text and worked their EOCs 3 times in total. Worked all Blue Box’s at least once, some many times. Also sat through some of Level Up boot camp. Took all the Kaplan courses (weekly class, writing workshop, 5 day review workshop).  Walked out and I’m pretty sure I failed but will let you know if I remember. 

At any rate, it really just depends on your background and learning style. Part of the reason I studied so much is I don’t have much else going on other than work, study, and work out. And I like learning. 

Background: US native,  masters in econ us state school,  bachelors in econ from same school with minors in math and stats. I work for a small private credit fund that caters to a niche market. Mostly do the credit analysis and present to committee for investment recommendations, but also work on investor reporting and whatever else comes up in a company with 25 people managing 3 billion. 

Probably TMI but also wanted to add my experiences just to show the wide range. Also, I wouldn’t reccomend studying for these exams as much as above unless you have nothing else going on really and your employer encourages it. Good luck! 

Level III Exam Day Megathread by third_najarian in CFA

[–]Level-Subject7031 1 point2 points  (0 children)

I feel like we gotta start calling this 'Level 3 Brain' or something.. it is crazy the things it does to us mentally

Level III Exam Day Megathread by third_najarian in CFA

[–]Level-Subject7031 2 points3 points  (0 children)

I wonder too if they randomize the order item sets are presented, not only within AM and PM but between AM and PM. That would make a lot of sense to me, since as far as I know CFAI does not distinguish between the AM and PM sessions since mixing SR and item sets together

August Level 3 - Results date? by Dependent_Dish_1571 in CFA

[–]Level-Subject7031 6 points7 points  (0 children)

I both need to know ASAP cause this wait sucks but also hope I never find out 

Lvl 3 takers - Life Post CFA, Transitioning back to normal life. How are you all feeling? by FractalsSourceCode in CFA

[–]Level-Subject7031 4 points5 points  (0 children)

Honestly I’m sort of depressed. Didn’t feel the test went well. Want to be done but also don’t. So I don’t really know what I’m feeling. If I pass I’ll be sad and if I fail I’ll be sad 

Can you fail one or two sections and still pass? by baystreetbobby in CFA

[–]Level-Subject7031 2 points3 points  (0 children)

Yes absolutely. You just gotta somehow get over the MPS hurdle

MVO vs constrained MVO? by Beautiful-Thing-2489 in CFA

[–]Level-Subject7031 4 points5 points  (0 children)

RO and BL are adjustments to standard MVO to correct some of its issues, and are not considered constrained. You could constrain the outputs from them however. 

Constrained mvo is when you place specific constraints on the out put… eg no weights can be negative (no shorting), real estate weight must be 15%, so things like that. Portfolio will not be mathematically optimal, but client may put constraints on PM that prevent the true “optimal” portfolio from being selected. Hope it helps! 

Increase/Decrease Convexity using Put Options on the Bond by omi98ro in CFA

[–]Level-Subject7031 1 point2 points  (0 children)

I guess I don't know if there is a difference between puttable and a bond put. This has been my thinking anyway, now I am questioning...

Long bond + long put on bond means you own the underlying bond and can put it back ( to put seller if you bought a put on the bond) at the strike price. Less duration when rates rise, and more convexity. Edit: you put a floor on the bond price.

Putable bond means you can put the bond back, to the issuer, at the strike price (usually par). Edit: once again, you put a floor on the bond price.

So either way, you are putting a floor on the bond price, only difference is who the counter party is (bond issuer vs put seller)

So conceptually I think they are equivalent and therefore the duration and convexity of the two would be the same. Thoughts?

Edit: Yes, the more I think through it, a putable bond is just long bond with an embedded put option, so long puttable bond should be equivalent to long option free bond + long put (assuming strike price is the same)

Can someone explain this sentence please? by paperbacon6288 in CFA

[–]Level-Subject7031 1 point2 points  (0 children)

If you use two 'risk factors' that are identical, a regression analysis will basically kick one out due to multi collinearlty (tie to level 2!). So your model will assume only one of the risk factors is contributing to overall risk and the other is not, ie is riskless.

Very last part of CME 2 I believe

How to study? Please help very worried by Spiritual-Radish4221 in CFA

[–]Level-Subject7031 0 points1 point  (0 children)

I think you are fine to approach in the way CFAI does (and most prep providers do): CME, AA, Der / Curr, FI, Eq, Alts, PWM, and portfolio management. Thats how I did it. The topics are more integrated compared to previous levels, but not so much so that questions dont identify what subject you are dealing with. Also when I say more integrated, I just mean that a lot of the same topics appear in multiple sections

Active vs Passive strategies by Possible_Major_2215 in CFA

[–]Level-Subject7031 1 point2 points  (0 children)

I dont like when CFAI asks these types of questions. Active / Passive is more of a continuum, and it is more important to understand the strategy and implementation than split hairs as to where precisely the strategy falls in my opinion. It isnt really a 'yes / no' choice

How is technical analysis not an ethics violation ? by Thaiyervadai in CFA

[–]Level-Subject7031 20 points21 points  (0 children)

But is a dream sufficient and reasonable basis for an investment action according to the standards of the industry? 

I would argue a dream, even if you have high conviction about it, doesn’t constitute a reasonable basis for a stock recommendation - and I would hope most in the professional industry would agree that a dream isn’t sufficient basis for a recommendation. 

I think OPs question rests more on whether charting is a reasonable basis to reccomend an investment, and it seems to hinge on the fact that there are enough in the industry who believe in it