The strategy was disclosed in the fund itself-- it jumps back and forth between value and growth. There was no violation in the non-disclosure the in strategy. However, I think there was a violation of another sort.
cdogstu77 Wrote: ------------------------------------------------------- > Taylor Rule??? I got 3.75%, but what about that > second part. I said an increase in rate would > cause recession, but thinking back i may have made > mistake in comparing to neutral rate. You need to include inflation, the real neutral rate, .5*inflation gap, and .5*output gap. When the inflation target is 2%, it simplifies to i=real neutral rate+.5*output+1.5*inflation-1 Now that I think about it, I can’t remember if their neutral rate was real or not.
ymc Wrote: ------------------------------------------------------- > op asset beta = 0.5 > > wacc = 3 + 0.52*9 = 7.68% i think that is was i got. 7.68% as the new wacc using .52 oper beta
nailit Wrote: ------------------------------------------------------- > yep, putties were otm, worthless paper. no credit > risk. no calcs. at least thats what I went with. > if I was right, that saved me sh1tload of time. > > 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. cool
I drank for about 6 hrs straight last night after the exam and couldn’t get wasted. got home after midnight. ate a little and went to look up this one thing in the book. Schweser has no mention of it. Worthless. So CFAI book it was. Only one little mention and clearly states it “increases risk tolerance”. Now, what the f does it mean? That can mean you don’t trim ur risk and just ride it. Does it mean you go and pile on MORE risk? I have certainly seen that in real life, so quite possibly the right answer. But what H Money means in gambling and trading parlance is u remove your original investment and whatever gain you have, you just let it be. The idea is you didnt have this money before, so you treat it like someone just gave it to you and therefore u r fine losing it. so it’s a form of mental accounting almost. westbruin Wrote: ------------------------------------------------------- > isn’t “house money” playing with “house’s money”? > > therefore, i think maintain. but might be increase > for sure.
nailit Wrote: ------------------------------------------------------- > yep, putties were otm, worthless paper. no credit > risk. no calcs. at least thats what I went with. > if I was right, that saved me sh1tload of time. > > 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. Weren’t the puts in the money? Exercise was 100, and the rate went to 125, but the currency had actually depreciated.
that is right. but you don’t go borrowing another 25K on top of that, whereby you increase you exposure. You just fool around with the new found loot. 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.
puts were definitely in the money
> > However, I looked it up in the books and if I am > reading it correctly they “must disclose and > receive agreement from clients before making any > changes to the investment strategy”. that’s probably strategic change… definitely don’t need agreement to sell some growth stocks and buy exxon mobil. not sure if they need to tell clients, we made a major shift from growth stocks to value stocks last quarter.
cdogstu77 Wrote: ------------------------------------------------------- > nailit Wrote: > -------------------------------------------------- > ----- > > yep, putties were otm, worthless paper. no > credit > > risk. no calcs. at least thats what I went > with. > > if I was right, that saved me sh1tload of time. > > > > 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. > > > Weren’t the puts in the money? Exercise was 100, > and the rate went to 125, but the currency had > actually depreciated. I thought they were at the money but regardless they are Euro puts. no current credit risk.
unless I am thinking of a diff Q, he seems to have clearly wanted to give up his exposure to Suiss mkt in exchange for EM Slash Wrote: ------------------------------------------------------- > The question about the swap for maple leaf: > 3-month LIBOR swap? They don’t want to give up > their profits in their expertise but they want to > gain on the unfamiliar Japanese market.
westbruin Wrote: ------------------------------------------------------- > > > > However, I looked it up in the books and if I > am > > reading it correctly they “must disclose and > > receive agreement from clients before making > any > > changes to the investment strategy”. > > > that’s probably strategic change… > definitely don’t need agreement to sell some > growth stocks and buy exxon mobil. > > not sure if they need to tell clients, we made a > major shift from growth stocks to value stocks > last quarter. Believe me I hope you are right, I’m not ready to lock this one down as a +1 yet until someone can reference a book page that verifies it.
I got 12%, but dont trust it Slash Wrote: ------------------------------------------------------- > did you guys get 6% for WACC? yeah I used the RFR
figures. I never got to that. Slash Wrote: ------------------------------------------------------- > sct123 Wrote: > -------------------------------------------------- > ----- > > nailit Wrote: > > > -------------------------------------------------- > > > ----- > > > I thought carve out was a total BS question. > I > > > surely didn’t come across that calculation > > before. > > > others did though. > > > > i caught this one on Thursday in practice exam > vol > > 2 exam 3 pm question 22.5 never had seen > this > > before. > > It was in the CFAI EOC questions
amen cdogstu77 Wrote: ------------------------------------------------------- > Taylor Rule??? I got 3.75%, but what about that > second part. I said an increase in rate would > cause recession, but thinking back i may have made > mistake in comparing to neutral rate.
nailit Wrote: ------------------------------------------------------- > amen > > cdogstu77 Wrote: > -------------------------------------------------- > ----- > > Taylor Rule??? I got 3.75%, but what about that > > second part. I said an increase in rate would > > cause recession, but thinking back i may have > made > > mistake in comparing to neutral rate. Yeah I think I said that they were worried about stagflation, and since they were raising rates slightly they risked hurting growth.
what rate? they were puts on JPY, with a strike of 100 and current exch of 102.5. I could be wrong on that one. Didn’t want to think too hard about the question at the time cause it felt like the type of answer they might look for LOL cdogstu77 Wrote: ------------------------------------------------------- > nailit Wrote: > -------------------------------------------------- > ----- > > yep, putties were otm, worthless paper. no > credit > > risk. no calcs. at least thats what I went > with. > > if I was right, that saved me sh1tload of time. > > > > 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. > > > Weren’t the puts in the money? Exercise was 100, > and the rate went to 125, but the currency had > actually depreciated.
nailit Wrote: ------------------------------------------------------- > I drank for about 6 hrs straight last night after > the exam and couldn’t get wasted. got home after > midnight. ate a little and went to look up this > one thing in the book. Schweser has no mention of > it. Worthless. So CFAI book it was. Only one > little mention and clearly states it “increases > risk tolerance”. Now, what the f does it mean? > That can mean you don’t trim ur risk and just ride > it. Does it mean you go and pile on MORE risk? I > have certainly seen that in real life, so quite > possibly the right answer. But what H Money means > in gambling and trading parlance is u remove your > original investment and whatever gain you have, > you just let it be. The idea is you didnt have > this money before, so you treat it like someone > just gave it to you and therefore u r fine losing > it. so it’s a form of mental accounting almost. ha ha i did the same but my body just rejected it
nailit Wrote: ------------------------------------------------------- > WACC question was totally whacked. First off, Sch > sez don’t bother. Fine. It’s basic fng > calculation. What pissed me off was cost of debt. > Am I supposed to price this company’s debt at risk > free 3%? That’s what I did and I know a few others > did that, but come on… That was crazy… If it gives you risk premium, and also gives you the beta of the debt (given as 0)… it pretty much means you have to use the CAPM equation to calculate the rate of return, however much your real world experience may be screaming otherwise. NC
Slash Wrote: ------------------------------------------------------- > did you guys get 6% for WACC? yeah I used the RFR No, I got 10.4%. 21% Re & 500 M 3% Rd & 500 M 8.4% Rpen & 800 M adds up to 10.4% for total assets. NC