mcpass Wrote: ------------------------------------------------------- > - I didn’t get the carve-out, what’s the > calculation? I figured cash was just 6% of the > portfolio, and the relevant asset was also 5% or > so. So I felt like the cash carve-out would have > minimal impact and went for 4.1. Didn’t know the > specific rules for calculating those so didn’t > spend more time on it. I’m not confident that this is right but for the carve out, they set the weight for it of the portfolio at 5% and it was less than that. Some of the cash needs to be allocated to that and drag down its performance, instead of dragging down the rest of the portfolio I calculated the gain from that section over 5% of the composite and got 3.44%. > > - went for ‘acute’ but don’t remember the question > so I can’t tell you why. > > - I went for dual reporting, was a 50/50 guess > though. It made the most sense for a transition > period. agree with acute, and I said she shouldn’t have dual reporting, but that was a guess
Carve out for the strategic method: (actual portfolio weight - $amount/total) x total = cash allocation => return = (cash return) x ($amount/cash allocation + $amount) cash allocation = (.05 - 4.2/100) x 100 = .80 Int’l equity return = 4.1% x (4.2/5) = 3.44%
Duel reporting is correct. One of the CFA mock exams indicated that both CEO and PM’s needed disclosure as the PM’s needed to know material information to pass on to their investors. Note that reporting does not mean supervising.
SanFranMatt Wrote: ------------------------------------------------------- > mcpass Wrote: > -------------------------------------------------- > ----- > > I’ve talked to a ton of people about that > question > > afterwards. Everybody had their reasons, but it > > was pretty much 50/50 on that Q (the loss > > aversion) and I can’t really say anyone had a > > great argument. > > > > There were a few others that got me. The 2-bond > > hedge figure? Couldn’t calculate my way to any > of > > the three answers. The carve-out, didn’t know > how > > to end up at any of them. This last futures > > question, my answer was 264 but the available > > answers were 254,259 and 262. > > > > Struck me. Overall, I think I did quite well. > > > > What did you have on the added return of the > > leverage? I thought I was spot on but > apparantly, > > many have a different number. > > > > Morning session was okay, not as bad as I > feared > > it would be. It looked a lot like the 2008 exam > > which I reviewed pretty well. Perhaps it got to > > some people who didn’t review that exam but for > > those who did it was quite alike. Still blanked > at > > the WACC and Grinold Kroner Q, though. Also > wasn’t > > too sure about the commodities question. > > > > GIPS in the afternoon was just too specific for > > me, I had hoped to see it in the morning > session. > > Probably went 2/6 on that one. Ethics was okay > - > > some curveballs here and there but that’s what > you > > can expect, and there were some vignettes where > I > > managed to calculate all the wrong answers as > > well, just to make sure I had the right. Felt > > pretty good. > > > I got 264 as well, and it took me a while to > figure out where I went wrong. I think the answer > was 259 though. I vaguely remember the beta’s > being 0.98 and 1.00. In that problem, you were > not supposed to multiply by the beta’s though (259 > / .98 = 264). > > For leverage, I think I had the lowest number. It > seemed straightforward to me and I didn’t give it > a second thought. It was a synthetic cash question. don’t think you apply the betas in the formula.
what about the am question on the options. strike and spot was both the same. i put no credit credit risk because a euro option but put there could be potential credit risk to hedge myself. not sure on this one.
nevcfa1 Wrote: ------------------------------------------------------- > Dsylexic Wrote: > -------------------------------------------------- > ----- > > i said acute. chronic ones can last really long > > -multiple years…there isnt much need to trade > > that often. acute ones need to be arbitraged > away > > asap -rapid trading needed -that was my story > > anway. > > Question asked “frequently”… “chronic” means > something that happens often… so answer should > be “chronic” rather than “acute”. > > “acute” can result in large trades, but > infrequently. > > Really a test of English than finance I think. > > NC Sorry wrong. Chronic ineffciencies cannot easily be exploited by trading. Acute can, so therefore the trader will trade more with acute ineffciencies.
sct123 Wrote: ------------------------------------------------------- > what about the am question on the options. strike > and spot was both the same. i put no credit > credit risk because a euro option but put there > could be potential credit risk to hedge myself. > not sure on this one. Strike was 100 and spot was 102.5 I think. I discounted the ‘payout’ by the risk free rate. There’s still potential credit risk to the long party as long as the option has value (usually the price of the option which wasn’t stated). But since the option was in-the-money, there was definitely some value to it.
monki Wrote: ------------------------------------------------------- > how about the very first question in PM - Yes / No > because not suitable / No because material > nonpublic info? > THat one threw me off already That was tough because they didn’t state if he was aware of the MNPI. I answered Yes.
was that the one about getting the independent analyst to research it? I said it was following the standards
What about compliance system? Does compliance officer have to train employees or can they do it themselves? I think i got this wrong. …i said they could self train.
isn’t “house money” playing with “house’s money”? therefore, i think maintain. but might be increase for sure.
Slash Wrote: ------------------------------------------------------- > was that the one about getting the independent > analyst to research it? I said it was following > the standards in terms of pooled accounts, clients are responsible to analyze the suitability, not the fund
It’s increase. You put in $1 in the slot machine and win 25,000. We are now playing with the the Casino's . AKA the House. Throw caution into the wind and take start playing $100 slots.
cdogstu77 Wrote: ------------------------------------------------------- > What about compliance system? Does compliance > officer have to train employees or can they do it > themselves? I think i got this wrong. …i said > they could self train. the word ing is bad… are they taking a program that was set up by company, but no instructor?. or are they really “self-training”? i.e. whenever you’re confused, look in the manual.
House money was on the 2006 exam. The soccer player got his bonus and invested it in a start up (more risky behavior).
Definitely responsible for employee compliance training
JustPass Wrote: ------------------------------------------------------- > It’s increase. > > You put in $1 in the slot machine and win > 25,000. \> \> We are now playing with the the Casino's . AKA > the House. > > Throw caution into the wind and take start playing > $100 slots. that $25K is your own money though. the “house money” is psychological. if you won the $25K and then kicked in another $25K, then that would make “increase” correct. basically, the feeling is “let it ride”. a guy i know with $50K job (and 50 years old) make $2.5MM on on stock back in internet boom, and then rode it the whole way down. my partial guess is he doesn’t consider the $2.5MM “real”. i.e. the house money effect. so he has no problems having 100% investment in spec stock.
westbruin Wrote: ------------------------------------------------------- > cdogstu77 Wrote: > -------------------------------------------------- > ----- > > What about compliance system? Does compliance > > officer have to train employees or can they do > it > > themselves? I think i got this wrong. …i > said > > they could self train. > > > the word ing is bad… are they taking a > program that was set up by company, but no > instructor?. or are they really “self-training”? > i.e. whenever you’re confused, look in the manual. The AMC specifically states that the compliance officer is responsible for training. That would mean employees cannot self-train.
How the heck can they have dual reporting?
dwight, thanks, didn’t know that … “self training” is such an obvious flashing light anyway…