Practice Exams, Volume 2, Exam 1, PM, Q101 Why wasn’t the adjusted r derived in question 102 used here as the discount rate? Practice Exams, Volume 2, Exam 2, AM, Q26 Why doesn’t the financial leverage ratio change? We changed the assets and used the new numerator in the asset T/O ratio, why wouldn’t we use the same numerator in the financial leverage ratio? The answer in the book is not clear. Practice Exams, Volume 2, Exam 3, AM, Q56 How many decimal places should the calculator be set to? In this question, using 4 decimal places and the store function (on calculator) produces B as the answer. Can we count on using the store function? Thank you!
Practice Exams, Volume 2, Exam 1, PM, Q101 Legitimate question. But I don’t think if you work it with the adjusted r that you get any of the answers. Practice Exams, Volume 2, Exam 2, AM, Q26 another good question. Schweser is open today; I’d be curious to hear what they say. Practice Exams, Volume 2, Exam 3, AM, Q56 With 4 decimal places, you should have gotten answer A: R150 = .0248 R90 - .0128 (1+R150)/(1+R90) - 1 = .0118 .0118 - (.06/6) = .0018 .0018 * 1275000 = 2295 discounted back at R150: 2295/(1.0248) = $2239.4614
Practice Exams, Volume 2, Exam 3, AM, Q56 If you use store for the de-annualization of R150 AND R90 and then use the stored values in the calculation of the FRA rate you will get answer B.
I remember that problem, Was a BS. If you took it to 4 you got the correct answer. If you used 5 it came out exactly to one of the other options
Using store preserves the full integrity of the interim calculation values and does not cut them off. Question was flawed.