Must Know Topics for 2008 L3 Exam

dang-it I always confuse the two.

cuspy coupon!

Singer Terhaar Analysis is used in formulation capital market expectations. Rememebr the market segmentation/integration approach wihere correlation is +1 of fully integrated mkts? Its nothing special, just the use of ICAPM method of calculation expected return on each asset class taking into account the market segmentation/integration approach.

Correlation is 1 for fully segmentated markets. It’s confusing…

yep, its +1 for full segmented. My bad:)

All the recommended vs. required for gips

I think it’s easier to list “all don’t need to know topics”… The list will be shorter :wink:

Rudeboi Wrote: ------------------------------------------------------- > - Singer Terhaar Analysis > > what is that ?? it is not in LOS but in Q5 (p.113, CFAI vol 3) Should we know this?

I believe so, there are examples in the material on how this needs to be calculated.

ST analysis is definitely one of the important concepts in Ch6. It is simple. Risk Premium = Std dev of stock * Correlation with Market * Sharpe Ratio of Market You need to see if the local market is fully integrated or segmeneted and use correlation value of 1 to calculate Risk premium(RP) for fully segmented part and the given correlation values to calculate RP for Integrated part. Add any illiquidity premium that you may be given. Then calculate the overall RP based on the weighted avg of RP of the two.

krishna1 Wrote: ------------------------------------------------------- > ST analysis is definitely one of the important > concepts in Ch6. It is simple. actually I know this. It’s with Schweser. I just don’t know the name for this, thinking that this is simply called “equity risk premium approach” :slight_smile:

You think that this long calculation can show up on the exam ?