Did all of AM.
I usually do well in ethics but this one got me good.
Just random thoughts:
#3 emailing friends mean things about the CEO of a company you cover in unprofessional I think but it wasn’t what they were looking for…
#4 Talking about private meetings you have been in to someone who doesn’t work for that company seems like a violation of confidentiality but…
#7 Tricky; answer would have been right if not for the negative slope
#11 I read the text and saw the note (4-DW) but just disregarded it at my own peril
First time I’ve seen a section on banks…awful topic
#19 All this time I’ve thought of “after tax operating profit” as simply NOPAT, which is EBIT * 1-T, and was one of the answers…nope, it was actually asking for cash flow , so had to add back depreciation to NOPAT…weird but okay
#21 I couldn’t get the NPV for the straightline or match the NPV they gave you for the accelerated depreciation for the life of me…
#27 This one tripped me up since I just used .45% for wDebt instead of .45/1.45 since it’s a percentage of total capital. Now I know to use the % they give you for D/E but it needs to be D/1+D (which gets you total invested captial) for WACC
#32 (this section has no numbers for some reason…) I always take issue with this because their reasoning makes like no sense. I swear sometimes your calculated price might be $1 off the market price and you say “oh it’s under/overpriced” but then they say “naw, $1 off is fine…” Then others time, like this one, if it’s not exactly the same, they say it’s under/overpriced. Whatever. I guess we should just assume unless they explicitly say “within $X is fairly valued” (which I’ve seen before) then any mispricing represents a trading opportunity.
#35 Literally never seen this before
#36 Thought this one easily makes sense after reading the answer
#43 NO THANK YOU
#47 They worded this one kind of weirdly. I know the greeks but missed this because it sounded more like delta than gamma
#51 Don’t think I’ve seen this one before but it’s an easy calc now
#59 I didn’t like how they worded this one: “Also, if the portfolio manager does not overweight securities for which he has forecasted the best relative returns, he will not generate positive relative returns.” You can also underweight securities compared to the benchmark to also add returns