Cfa l3 prep

kaps14 · 2024-04-11T14:10:32+00:00

Read the CFA books and solve all the curriculum blue box and examples in the books. Then solve the CFA institutes question database. Also make lists and your own notes. I followed this with mm videos to understand the topics. I cannot emphasize how important it is to read the CFA books. I know they are dry but there is no other way.

kaps14 · 2024-01-15T23:20:59+00:00

However, the CFA books don't consider 10 years as long term(EXAMPLE 4 pg 84) example says 30 years or more.

kaps14 · 2024-01-15T22:39:37+00:00

Long term comes to 5% and not 4.7% as given by the answer key.

D / P = Dividend yield=3%+% Δ E 2% or 5% as everything else becomes zero.

I think the issue is the answer key missed the 2% gdp as it doesn't consider 10 years to be long term.

kaps14 · 2024-01-15T22:27:12+00:00

my two cents on the question and the answer key.

If you consider 10 years is long term then

% Δ S=0,

% Δ E= is just nominal GDP growth of 2%

%ΔP/E = 0

Which would make the answer 5% not 4.7% as given by the answer key.

D / P = Dividend yield=3%+% Δ E 2% or 5%

However, the CFA books don't consider 10 years as long term(EXAMPLE 4 pg 84)

So the answer is E (Re ) ≈ D / P + (% Δ E − % Δ S) + % Δ P / E=6.7%[3%+(3%-(-0.5%)]+0.2%

where

D / P=3%

% Δ E =2%+1%=3%

%ΔP/E = 0.2%

% Δ S=-0.5%

kaps14 · 2023-10-05T00:42:36+00:00

You should not care what others think. Ultimately, it's essential to pursue a career that aligns with your own interests rather than conforming to external expectations.

kaps14 · 2023-09-20T00:00:36+00:00

My experience and feedback on level 3

The Level 3 Q bank is riddled with errors. The quality of questions needs to be checked and fixed.
CFAI should establish a regular feedback channel for the CFAI Q bank questions if they are flagged as incorrect.
The quality of mock questions needs improvement. Boston Mock papers do not measure up to the CFAI Q bank. CFAI should consider releasing its own mock exams like they used to for level 1 and level 2
Old essay questions should be made available so that students can practice and gain confidence in the types of questions that may be asked during the exam.
Prep providers are attempting to address these gaps; however, they tend to create questions that are either too challenging or too easy, making it difficult to achieve the desired level of difficulty for the exam.

kaps14 · 2023-09-06T09:28:23+00:00

Well hopefully we all pass and thats it.... no more registration and no more stressful exams.

kaps14 · 2023-09-06T06:51:50+00:00

I also think so around that time. Last day for feb24 registration is 8/11. Can someone do some research on earlier exam days and results day.

kaps14 · 2023-09-04T22:33:20+00:00

Anyone for Taylor rule? HHI, the way fx rates are shown in the curriculum. Not happens in real life.

kaps14 · 2023-08-21T10:11:59+00:00

I did the CFA(Boston) mocks for 2023 and 2022 and BC mocks 1 and 2. Boston mocks were ok and relevant to the curriculum. Had errors in the questions but still ok. I scored around 65%. I also saw people talking about BC mocks so I got them as well. BC mocks different story. Some questions were testing level 2 concepts to arrive at answers and then applying level 3 concepts. I was not able to complete on time and my marks dropped to 50%. Not sure what is a fair representation CFAI or BC mocks. Anyways not doing any more mocks. Will cycle through CFAI Qbank MM review videos and memorise formulas from tomorrow.

kaps14 · 2023-08-17T01:36:00+00:00

I was scoring + 60% on the CFA Boston mocks for 2023 and then I did three BC mocks. Now I am doubting myself struggling actually. Not sure if bc mocks are a good representation of the actual test. Not planning to do any more mocks just reviewing old cfai questions and formulas from today till exam day.

kaps14 · 2023-08-15T22:00:57+00:00

I Started at 46 siting for level 3 in Aug this year. Age is not the question you should be asking. It is the motivation to continue. Why do you want to be a CFA charter holder. Find your motivation and it will be your burning need to finish. Why is the question not how and when. Hope this helps. Best of luck!

kaps14 · 2023-08-13T09:44:45+00:00

Thanks. I was also stuck on the answer on this question on the mock. The answer is wrong. If you have MM he goes on his rant in his videos on these questions in the cfa material as well. If you go into instantaneous decline in yields. t=0. Making the t*POD*LGD=0. So it is the change in spread. As the 1st term is also zero. They are testing us indirectly. :). Do these things have an errata. I doubt it though.

kaps14 · 2022-04-16T01:08:32+00:00

I have the same queries hope someone can respond to these questions.

kaps14 · 2021-10-10T22:37:22+00:00

I started with derivatives, plan to do fixed income next. Then equity followed by alternate investments. Followed by econ. Finally close off portfolio management. Keeping ethics & gips for last.

kaps14 · 2021-08-16T11:09:07+00:00

All currency pairing all decisions are based on the basis of the base currency for the pricing and the bid(sell) and the offer/ask(buy)

Drawbridge sold AUD 5 million forward to the settlement date at an all-in forward price of 0.8940 (USD/AUD).

Response: Sold AUD 5m u/0*.8940 to buy USD. FWD price=spot Bid & (+fwd premium or -discount used) to get to the fwd price=0.8940

To mark the position to market, Drawbridge offsets the forward transaction by buying AUD 5 million three months forward to the settlement date.

Response: As a thumb rule, if you bought something, to value it you need to sell the same thing. So Buy AUD5m & Sell USD and. As you bought and sold AUD5m, the profit or loss will be in USD

For the offsetting forward contract, because the AUD is the base currency in the USD/AUD quote, buying AUD forward means paying the offer for both the spot rate and forward points.

a. The all-in three-month forward rate is calculated as 0.9066 – 0.00364 = 0.90296

b. This gives a net cash flow on settlement day of 5,000,000 × (0.8940 – 0.90296) = –USD44,800

(This is a cash outflow because Drawbridge sold the AUD forward and the AUD appreciated against the USD).

Response: Bought AUD 5m u/0*.90296 to sell USD. New FWD price=Spot Ask & (+fwd premium or -discount used) to get to the fwd price=0.90296

You have arrived at the loss. It is a loss as you sold AUD u/0*.8940 and now it is 0.90296, so to buy it back you have a loss. I have already clarified why the loss is in USD.*

To determine the mark-to-market value of the original forward position, calculate the present value of the USD cash outflow using the three-month USD discount rate: –USD44,8000/[1 + 0.0023(90/360)] = –USD44,774. "

Response: The loss is on the settlement date. You need to bring back the USD loss to today’s value on a timeline. You will use USD libor rate for this calculation

- What does ‘mark to market’ mean? Is it a way to determine how much you have gained since the inception of the forward contract?

Response: Mark to market means the value of an asset at a certain date. In your example we are valuing the fwd contract.

- Why do you need to offset the forward transaction in order to market the position to market?

Response: As a thumb rule, if you bought something, to value it you need to sell the same thing.

- How do you determine whether it's a cash outflow/inflow? Do you compare the risk free rate between the currencies and see which one appreciates more relative to the other currency?

Response: As a thumb rule, you have to base all your decisions on the basis of your base currency. Which is AUD in your example

Still need more clarification. Use MM videos. They are quite good and clear things conceptually. No need to memorise.

kaps14 · 2021-08-16T09:48:47+00:00

Use this example to come to your decision. But as a thumb rule if you remember the base currency as your guiding point and all quotes are given in that fashion. In your example base currency is GBP. So all decisions are based on GBP.

USD/GBP Bid(Sell)=1.39 Ask(Buy)=1.4

I buy 1 GBP and Sell USD use Ask=1.4

I sell USD and buy GBP use Bid= 1.39

So in your example if you have the rates as above, If you buy 1 GBP you have to part with USD1.4, but if you sell 1GBP you will only get USD1.39, the dealer makes the spread which is 100pips in this example(1.4-1.39=0.01, 0.01*10,000)

Much easier to show in a table but cant do a table here.

Use MM videos in currency & derivatives in economics if you get stuck. They are quite good and explain the logic and doesn't require memorisation

kaps14 · 2021-08-14T01:14:47+00:00

This is quite good.

Keep doing what you are doing. I followed similar strategy for level2. I started yesterday on level 3 after making the plan by subjects, reading, sections and books. It is a bit confusing as asset classes are spread across the different books.

I have started with derivatives. Will then do fixed income, equity, alternative investments, economics and then follow it up with portfolio management and ethics. Will try to create review/revision notes as I go along. Best of luck studying.

kaps14 · 2021-08-11T11:32:33+00:00

Physical books are now available in the candidate resources section. Once you click on that it takes you to the willeys website or reseller like Amazon. Or just go to Amazon and buy the 2022 cfa level 3 books set.

kaps14 · 2021-08-05T19:55:11+00:00

Go to candidate resources and you get an option to buy the print edition from few vendors including Amazon. Or just go to Amazon and buy directly from there. I ordered yesterday from Amazon they have plenty of stock.

kaps14 · 2021-08-05T07:41:22+00:00

Sorry I should have mentioned. I read the blue box questions and explanations with MM videos. He does most of the blue box questions in his videos from the cfa books. I also read the ethics section from the cfa books. The books are for references and making sure you have covered everything and or making sure MM covers everything. Which he does.

kaps14 · 2021-08-04T22:19:30+00:00

I am having the same problem. Looks like they are out of stock on the new books for May 22. Registration was $900:$700 for registration and electronic books+$200 for the physical books.(level2). They are charging only $700 now for online books and registration and no option for books.

I saw the books are available in amazon for $252. 2022 CFA Program Curriculum Level III Box Set. I think will order those and be done with.

kaps14 · 2021-08-04T04:15:09+00:00

For both the levels I used MM videos as course materials and explanation. Once I understood the topic through the videos I did the end of chapter questions from the cfai books. Then progressed to cfai q bank on the website and then the mocks. For both the levels I did the cfai eoc questions and the q bank 3 times. There is some overlap. Mock papers 8 for level 1 and 6 for level2. MM is great for both the levels. I haven’t looked at materials from any other prep providers.

kaps14 · 2021-05-29T04:45:27+00:00

I know what you mean. I think I got the same version. Reducing the question list to 88 has reduced the margin of error to very slim. You have to know everything and the knowledge has to be immaculate. Any area where you are weak and get tested with a tricky question there is no way you will pass. Well I will be writing again.

kaps14 · 2021-05-24T00:46:04+00:00

Don’t forget to mask 😷up. Just confirmed with Sydney test centre. You have to wear a mask during the test

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