Kesselaar Topic Test

I am sure you are all aware of this brutal topic set. Why do they use the risk free rate to get the discount factors? Most problems give you a LIBOR term structure. This one didn’t (just spot LIBOR), and I was just completely confused on what rate to use.

i decided to skip ‘only’ this item set. what do you think ?

What a good idea

Jounin, can you solve Ericsson with at least 83%?

@flashback : no, i can’t

^neither I can. 50 % maximum regardless the level of study and prior knowledge. I hope such sadistic vignettes wouldn’t appear on real exam.

Funny thing is that for one FRA test I could only do 2 of them, and the other 4 i just chose A, and I ended up getting 6/6.

Empirical researches showed that chimps throwing picado darts chosen better investment decisions than 70% of financial analysts. I guess this should be also the same.

If that were the case, why are people still studying for the CFA exams?

Because they hope they can outperform the chimps.

guys so good to read you … was redoing kesselaar and it’s definitely a tough patch… tell me how in the word did they define the f… value of that oil project in Latvia at 69.675??? how do we see that in the text ? and yeah… that overnight rate (is not the RF rate by the way) really surprised me … why not the WIBOR/EURIBOR??

kesselaar was a nightmare, time invested over just capitalizing on low hanging fruit, doing a simple GGM question vs Currency Swap are still both worth 0.83% in the exam.

I agree Kesselaar is a nightmare. I can rock Ericcson though so sopefully they will even out. Some of the equity method stuff I get tripped up on and the early stages of pensions I cant do well (like the initial calculation of benefits for a person) I am good with PPC TPPC, Funded status etc.

That’s funny. I did the opposite - I rocked Kesselaar but bombed Ericcson. Just retired Ericcson again - and again bombed it. Only got one more question right than my first try.

I hope neither of them is on the exam, they are both very time consuming

That’s the only thing I am a bit worried about. My tendencies are to get bogged down on a topic like Kessalaar - I can value those derivatives its just takes me 30 min to do so. Then I have to rush through other vignettes and end up making stupid mistakes. I have done this on nearly every mock exam I have taken.

Can one of you tell me how they found that value of 69.675?

I can only see 39.675 not 69.675.