Anyone have any tips/advice on tackling SS7 - FSA Synthesis? The LOSs are pretty vague and the readings seem to just be a lot of case studies. Does anyone remember how this was covered on last year’s exam? Any insights would be greatly appreciated…
The 5 core FSA readings have been the same for a few years - Intercorp. Inv, Pensions, Pooling vs Purchase, Multinational Ops, and FSA Synthesis. I saw a question from the 2003 exam which a vignette with 2 companies. They had 4 - 5 statements about the financials of each company, for example, one company had off balance sheet leases, one company used LIFO and the other used FIFO (FIFO - LIFO difference was included), another company had underfunded pension liabilities, one of the companies had a guarantee on the debt of a subsidiary, and another company had a VIE with receivables. The vignette asked questions on what was ROA, ROE, Debt ratios (D/E), Receivables Turnover, before adjustments and after adjustments. It seemed simple when I read the question, but I got one or two wrong because you have to be very sure whether you’re adjusting liabilities, equity, and the offsetting part in assets. Not knowing where to make the adjustments will cost because you will not get D/E or ROE correct. Anyways, the best thing is to do as many of these problems as you can get your hands on, that’s why I didn’t mind working out the 2003 questions I found.
^Thats scary. And I think we are going to have 2 vignettes this time.
Grrrr!!! I wish the CFAI texts had more practice questions for SS7!!!