Anybody else thrown by the fact that a cash flow of -650k in the mock exam was actually an inflow? From the answer choices it was obvious…but on a morning section I’d have blow that completely… Did the header on the table say “Cash Outflows” or something like that (so that the negative cash outflow was an inflow)?
yeah, i only got it right by trial and error 
glad to hear i wasn’t the only one. csk, i’d be interested to get your input on my other mock-related thread having to do with their use of beta in the derivs questions…
MaxTheDog Wrote: ------------------------------------------------------- > glad to hear i wasn’t the only one. csk, i’d be > interested to get your input on my other > mock-related thread having to do with their use of > beta in the derivs questions… i complete fudged that sh1t up man. I was pressed on time and decided to skip it 
solution seems trivial though,
MaxTheDog Wrote: ------------------------------------------------------- > Anybody else thrown by the fact that a cash flow > of -650k in the mock exam was actually an inflow? > From the answer choices it was obvious…but on a > morning section I’d have blow that completely… > Did the header on the table say “Cash Outflows” or > something like that (so that the negative cash > outflow was an inflow)? Yeah, I am still to figure out how come -ve cash flow is actually inflow. Can somebody tell me why they have used Daily Valuation Method rather using Modified Dietz Method? It is not 2010. Daily valuation is applicable after 2010. So, Modified Dietz method should be used and answer should be 5.57% rather 5.89%.
Modified Dietz should be used from a Client perspective, but from a Manager perspective you should use TWR because TWR isnt effected by client cash flows that you have no control over.
bigwilly Wrote: ------------------------------------------------------- > Modified Dietz should be used from a Client > perspective, but from a Manager perspective you > should use TWR because TWR isnt effected by client > cash flows that you have no control over. I couldn’t find it to be mentioned anywhere. Modified Dietz is also TWRR but it is good until 31 Dec 2009. and, daily valuation is good after that.
Are we required to calculate MDietz on the exam? I didn’t see an LOS saying we were required to calculate it.
and, any thought on -ve cash flow. I just checked CFAI book and they have used +cash flow for contribution. Why are they f*cking with us? They are contradicting their own books.
pimp Wrote: ------------------------------------------------------- > Are we required to calculate MDietz on the exam? > I didn’t see an LOS saying we were required to > calculate it. No body knows. All we know that it is in syllabus and we are supposed to know. They have already given hint by giving it in Mock Exam.
no, there were no MDiez on exam, just TWR
comp_sci_kid Wrote: ------------------------------------------------------- > no, there were no MDiez on exam, just TWR MDietz is one of TWR.
I should confirm the LOS in the CFA book, but Schweser makes a point of noting that the command word in LOS 49.e has been changed from “calculate” to “summarize and justify”. 49.f also uses the command word “state”. However, 49.p has “calculate” for the real estate total return, income return, and capital return. So, if the LOS mean what they should, we could see a real estate calculation, but not for the general provisions.
CFA is wrong on the answer. I’ll them to court anytime. They think they own my mind. I got news for them, they don’t and they wrong.
no requirement to calculate these this year with the exception of real-estate capital and income returns.
don’t get too tied to the LOS wording…doesn’t it also say we’re responsible for all the end of reading problems… thought i read that somewhere…
OK, if they provide you with the market value on the date of the cash flow you MUST use time weighted return as it is the most exact return. If they only gave you a beginning of the month mv and end of the month MV and a cash flow, then you can use Modified Dietz to approximate the return for the month. It will be close to the TWR normally, but depending on the size of the CF it can be severally distorted. TWR is Better than Dietz
bigwilly Wrote: ------------------------------------------------------- > OK, if they provide you with the market value on > the date of the cash flow you MUST use time > weighted return as it is the most exact return. > If they only gave you a beginning of the month mv > and end of the month MV and a cash flow, then you > can use Modified Dietz to approximate the return > for the month. It will be close to the TWR > normally, but depending on the size of the CF it > can be severally distorted. > > TWR is Better than Dietz MDietz is one of TWRs. I think you are talking about Daily Valuation Method which is another TWR.
Yes you are right it is a form of TWR but I think most people know what I’m referring to, the geometrically linked TWR, which as you say might be called the Daily Valuation Method, but you dont need to value daily so not sure on that.
bigwilly Wrote: ------------------------------------------------------- > Yes you are right it is a form of TWR but I think > most people know what I’m referring to, the > geometrically linked TWR, which as you say might > be called the Daily Valuation Method, but you dont > need to value daily so not sure on that. Agreed! Now, problem is that why the heck did they use geometrically linked TWR because it is a recommendation which will become requirement after Jan 2010. MDietz is required as of now. So, technically we can use it. So, My question why do we have two correct answers for same question. if we follow Mdietz then it comes out to be 5.57.