Lets list little things we find that CFA would otherwise use to trip us up. Ill start; ~The repo rate is a function of the repo term, NOT the maturity of the collateral securities.
Duration of a bond portfolio is the weighted average of each bond duration. Dollar duration of a bond portfolio is the sum of each bond dollar duration.
I have a feeling that the Implementation Shortfall calculation will show up on the test. Plenty of tricks there.
mo34 Wrote: ------------------------------------------------------- > I have a feeling that the Implementation Shortfall > calculation will show up on the test. Plenty of > tricks there. Why did you have to remind me of that!!!
I’m having all kind of troubles with the CFAI end of chapter problems on this subject. Decision price, next day open, next day close, execution price, cancellation …etc … just very tricky.
mo34, you are braver than me. I am having problem in following all those terms in Schweser books…not even mentioning CFAI.
The main driver of risk tolerance for a foundation is time horizon, not spending level. This was not the case in prior years’ curriculum.
Yes, just finished that Portfolio Execution. And its a really biatch. My question is and I hope you guys can help me. How deep do we need to know it? I can handle a paper portfolio vs. real portfolio calculation, but what about the breakdown (i.e Market Impact, Opportunity Cost, Realized G/L) Really important to know? Thoughts?
This part is not well covered in Shweser, there is no way you can solve the CFAI end of chapter questions based on Schweser alone. The CFAI has about 4 problems where you have to calculate the breakdown (or at least one of the components of the shortfall). I would suggest you at least read the solutions to those problems.
UAECFA Wrote: ------------------------------------------------------- > Yes, just finished that Portfolio Execution. And > its a really biatch. > > My question is and I hope you guys can help me. > > How deep do we need to know it? > > I can handle a paper portfolio vs. real portfolio > calculation, but what about the breakdown (i.e > Market Impact, Opportunity Cost, Realized G/L) > > Really important to know? Thoughts? Ahhm… what reading is this 
Implementation Shortfall is in reading 41.
In 2006 Q11 Implementation Shortfall and its components was tested. But on a per share basis. So the past exam Q11 was relatively easier compared to the end of chapter problems.
looks like I’m gonna have to open that CFAI box after all
Roll Return: the closer the contract is to maturity, increase in convenience yields, and yield curves in backwardation all result in greater roll returns.
Is it a bad sign that I’ve finished the curriculum and all I can say about each tidbit mentioned is “yeah, that sounds like something I read”?
In a portfolio the inclusion of Commodities becomes redundant in the presence of Hedge funds and private equity…
Why do you say that?
AbbeFaria Wrote: ------------------------------------------------------- > Is it a bad sign that I’ve finished the curriculum > and all I can say about each tidbit mentioned is > “yeah, that sounds like something I read”? That’s exactly what you r supposed to be saying at this time, and better than saying these words on 06/07.
Exhibit 1, P317, Reading 27 is a good summary of the entire chapter. You may need to write few notes about the immunization process, though.
sorry… In the presence of hedge funds and commodities … real estate is a resuntant asset in the portfolio…