Just took this. Did ok.
do it all last nite in 2 hrs. 45/60.
75%
Sample 1: 73.33%
Sample 2: 86.67%
Pretty happy with that.
I’m having a hard time grasping the correct response to #47. Before the Swap, Bing held a FIXED rate loan (payer). Expecting interest rates to decline, he enters into a swap to Pay FLOATING receive FIXED. How can Bing’s sensitivity to interest rates decline when he traded a FIXED rate loan (no sensitivity) for a floating rate loan (rate-sensitive)? I don’t get it.
Also, last year, I seem to remember seeing what the average scores were for the mock exams after you graded your results. I didn’t see it this year. Maybe I missed it. Does anyone know what the averages were for each Sample Test?
In question 58,
CFAI gives the explanation that _" A long position in backwardation will produce a greater roll return than a position in contango if the price rises." _
Can anyone explain this to me?
I get confused with this and cant get the answer. Thanks
In a downward sloping term structure of a commodity ( forward rates ) , also known as a backwardated curve , the futures price must rise towards the spot for every contract maturity . Simply buying and holding will generate a profit , as the futures prices rise towards the spot.
In the contango case , futures price are higher for distant contracts than the spot . So futures prices must dip towards the spot as time goes on. So you generate the profit by anticipating this and going short . Sell-and-hold should generate a profit if you wait for the convergence.
Quite happy with my first test results 23 / 30 or approx 77% although I made some silly errors. Tougher than most of the PMs I’ve done.
Will be doing the 2nd test probably at end of day.
Gave Sample 1 now. Got 70%(21/30). Got nailed in ethics(2/6). Lets hope for the best tomorrow
This is a perfect, or near perfect example why CFA 3 SUCKS.
There are many ways to define “sensitive” and many ways to set a baseline risk (risk neutral position to the firm)
And if you remember what happend for this question, next time they will flip. Head you lose, tail they win.
Sick.
>I’m having a hard time grasping the correct response to #47.