Level I

price weighted vs. unweighted index value computation

Given three stocks valued at 10,20,60 dollars in a 3 stock portfolio, how would you compute the price weighted index value vs. the unweighted index value? I thought both index types use arithmetic mean computation for their respective values.

Capital market efficiency and survivorship bias

How does survivorship bias affects capital market efficiency? Does full capital market efficiency mean that prices incorporate all information into the respective assets?

evaluating new asset before adding to the portfolio

hi everybody, with that u do well in your studying

book 4 page 363 they provide us the formulla of how we evalauting the diversification benefit of new asset beofre adding it to the portfolio

and the formulla states the the E(Rnew)=RF+ (standard deviation of new asset) * correlation of the new asset and portfolio) divided by stanard deviation of the portfolio * ( E(Rp)-RF).

my question if why we should use only the standard deviation of the new asset to determine the covaraince in the numerator??

Thank You 

Deferred Tax Asset vs. Deferred Tax liability

I am confused on the difference acounts that affect DTA and DTL. Specifically, how would we know if an account changed DTA vs. changing DTL (either increasing or decreasing)?

CFAI Website Mock Exam Help- Please!

Hello all,

Just completed a CFAI mock exam and got a score but when I went to review my attempt it logged me out.

I can see my attempt/score but is there any way I can access it to review what I got incorrect?

Any help would be greatly appreciated, I would really like to learn from what I got wrong.


Eurobond v Global Bond

Can someone please clarify the difference between these two? Schweser notes don’t go into much detail on the latter.

Portfolios management question

Can anyone explain what is the difference among CAL vs. CML vs. SML?  

I felt confused when I did the mock exam .


Margins related to Futures Contracts

Initial futures price on Day 0 $100

Initial margin requirement $5

Maintenance margin requirement $3

Settlement price on Day 1 $103

Settlement price on Day 2 $96

Settlement price on Day 3 $98

If no funds are withdrawn and margin calls are met at the beginning of the next day, the ending margin account balance on Day 3 for an investor with a short position of 10 contracts is closest to:

A. $70. B. $80. C. $100.

I do not get how to compute the answer for this. The solution does not provide a clear answer, either.

Operating cash flows?

Under International Financial Reporting Standards (IFRS), reported operating cash flows are most
likely to be increased by the classification choice made for:
A) Dividends paid
B) Interest expense
C) Impairement losses on fixed assets
The correct answer is B. Can anyone explain why. Thanks!


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