Level I

The relationship between rates, inflation, purchasing power and exchange rates...

I am a bit thrown off by the relationships between inflation, rates, currency appreciation/depreciation and exchange rates.  I have put together the following statements and I was wondering if they were correct?   If anyone could add any pertinent/useful information to them, that would be great.  Thank you in advance. 

If inflation in country X increases vs. country Y, currency in country X will appreciate relative to country Y.  There is an inverse relationship between exchange rates and interest rates in two different countries.  Continue reading

FRA Difficulty Problem

I’m having a lot of difficulty with the FRA section. All other levels are fine even the derivatives isn’t that bad compared to FRA. Does anyone have tips and advice on how to approach this section? I’m an Econ major and don’t find the other sections really hard and I’m using the Qbanks as well and the only section I’m struggling is FRA. 

Just wanted to see if anyone is having the same issue and what advices you have?

Thanks a lot Continue reading

Schweser Qbank - basic, intermediate, advanced

Hi,

just wondering, does anyone know what the point of these question difficulty categories is? On the CFA exam will there only be advanced level questions, or basic as well? So what setting characterizes the real test the best, leaving out basic/intermediate ones, or not?

Tx Continue reading

Change of exam center

I have to change my exam center as I will be in US at the time of the exam. I was discussing the process with one of my firends and she said probably there is a fees of 100$ to change the center. Anyways, I have to change it , so I went to the CFA site and in my profile it showed option to change center. I choose NY as I will be in south New Jersey and thinking NY center wil be closest to it. After choosing the new center it just said your center is changed sucessfully withut asking for any fees. I haven’t recieved any email as confirmation though. Continue reading

Net Working Capital & Stretched Payables

Im confused,

A significant increase in days payables above historical levels is most likely associated with:

A)
an increase in net working capital.

B)
an unsustainable increase in reported earnings.

C)
low quality of the cash flow statement.

I said A) Increase in net working capital.

My reasoning was that if days payable increases, that means you are paying at a later date, therefore holding more cash now. Continue reading

convexity effect

Hello all,

Ok my algebra is a little rusty, but is this simply order of operations? Obviously the second equation will get rid of the “-“, and results to a different answer. 

#1: One example of convexity effect when YTM declines by 200 BPS, and is negative;  [97.3 x (-0.02)2] = 3.89%  (this is the correct answer, but they show the original equation to use as the one below…)

vs.

#2: convexity effect = 1/2annual convexity(changeYTM)^2:  1/2 x 97.3 x (-0.02)^2 = .0195 or 1.95%

Continue reading

What if you fail?

What happens if you fail the Level 1 Exam in June?  Does it stay on a record, or prevent you from taking it again in December?  Not trying to belittle the exam, but I’d like to give it a shot in June as I have Masters in Finance already and 6 weeks off to study.   Continue reading

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