former trader Wrote: ------------------------------------------------------- > are you sure in the textbook it says interest in > the economy and not fed funds rate? 100% sure. I checked my notes and CFAI books.
Jed Wrote: ------------------------------------------------------- > The very fact that so many of these multiple > choice questions can be so thoroughly debated > without resolution, in some cases with solid > arguments for 3 of the options, is pretty > indicative of a serious problem with the way the > exam was written. very poorly written
core-satellite reduces misfit risk because the active managers can have their own “normal” benchmark to be compared against, instead of general benchmark.
core satellite looked like the obvious right answer to me. i believe most people got that answer when discussed in a different thread.
jedhenley Wrote: ------------------------------------------------------- > For what it’s worth, the first thing listed in > Schweser is credit risk (not that it’s listed in > priority, but it is the first thing mentioned as > affecting the repo rate). I’m still pretty > confident on quality of collateral - it matters, > just matters the least. I am not trying to sound harsh. But what Schweser says means absolutelly nothing for CFAI. The only thing that matters from the standpoint of answering CFAI questions is what CFAI books say.
Man, I woke up this morning and I realized I screwed up the FCFE. The worst part is I knew how to do it (did it 1000+ times for L2), and I thought I had it right for L3, but I realized this morning that I didn’t discount the values of all my future cash flows. F*ck me.
volkovv Wrote: ------------------------------------------------------- > I am not trying to sound harsh. But what Schweser > says means absolutelly nothing for CFAI. The only > thing that matters from the standpoint of > answering CFAI questions is what CFAI books say. the schweser people aint idiots. if schweser says it chances are somewhere the cfai says it too.
former trader Wrote: ------------------------------------------------------- > SRI has a growth and small-cap bias and both > answers were among the choices. I posted it on SRI thread, but here it is again: CFAI V4, p. 130 says: “…applying a negative screen, the portfolio manager may exclude (because of environmental concerns) companies from basic industries and energy, which sometimes present a concentration of value stocks; as a result the portfolio could have a growth bias” “SRI mutual funds have been documented to have an average market-cap bias toward small-cap shares” It is correct that SRI have to biases one towards growth and one towards small-cap. But these biases are manifested under different conditions. In our question, by indicating value sectors they were leading us towards growth bias. Small-cap bias wasn’t really applicable.
Someone else pointed out that the manager was already a growth manager, thus can you really be biased towards it if that’s your mandate? I put growth though - so I hope that’s the answer. 
For the core-satellite question I changed my answer at the end because the question said that the sponsor was concerned about “managers only returning market returns, and not generating alpha” or something like that. I forgot what I changed it to though.
Aerius Wrote: ------------------------------------------------------- > Someone else pointed out that the manager was > already a growth manager, thus can you really be > biased towards it if that’s your mandate? I put > growth though - so I hope that’s the answer. > for what it’s worth the secret sauce only mentions a small cap bias when it comes to SRI. i too picked growth.
I totally deserve -1, as I don’t even know what SRI stands for, lol
volkovv Wrote: ------------------------------------------------------- > former trader Wrote: > -------------------------------------------------- > ----- > > SRI has a growth and small-cap bias and both > > answers were among the choices. > > I posted it on SRI thread, but here it is again: > > CFAI V4, p. 130 says: > > “…applying a negative screen, the portfolio > manager may exclude (because of environmental > concerns) companies from basic industries and > energy, which sometimes present a concentration of > value stocks; as a result the portfolio could have > a growth bias” > > “SRI mutual funds have been documented to have an > average market-cap bias toward small-cap shares” > > It is correct that SRI have to biases one towards > growth and one towards small-cap. But these biases > are manifested under different conditions. In our > question, by indicating value sectors they were > leading us towards growth bias. Small-cap bias > wasn’t really applicable. most utility and energy companies are also large caps
Socially responsible investments - or some such hippy nonsense 
ok, i just don’t know the short form
I believe the SRI question also mentioned some requirement about 50% of energy from alternative sources. Those are obviously small-cap, growth-oriented companies, which means we’re right the hell back where we started. I just love deciding which is the better of two right answers.
man, are we still on SRI question? I have seen the discussion on this question more than 20 times now.
Sorry to go back to the PE ratio that everyone seems to have gotten right at 16.3, but out of curiosity, i associated forecasted 08 PE as Leading PE? meaning P1/E1(08)= D1/E1(08) / r-g (07)? So i got 15.8? Did i overthink forecasting meant leading?
sdcfa Wrote: ------------------------------------------------------- > Sorry to go back to the PE ratio that everyone > seems to have gotten right at 16.3, but out of > curiosity, i associated forecasted 08 PE as > Leading PE? meaning P1/E1(08)= D1/E1(08) / r-g > (07)? > So i got 15.8? Did i overthink forecasting meant > leading? r-g is 08. Your growth rate changes based on the retention ratio and ROS (.7 x .148) = .1036
I meant ROE not ROS
sdcfa Wrote: ------------------------------------------------------- > Sorry to go back to the PE ratio that everyone > seems to have gotten right at 16.3, but out of > curiosity, i associated forecasted 08 PE as > Leading PE? meaning P1/E1(08)= D1/E1(08) / r-g > (07)? > So i got 15.8? Did i overthink forecasting meant > leading? Not sure g(07) is the right one to use. I think everything needs to be forward looking. I can see the logic for using g(07), and I don’t think they ever made it totally clear about what to do when the growth rate changes, other than use a multi-stage model. Incidentally, I noticed that if you accidentally rounded your growth rate incorrectly, you also got 15.8, even if you used 2008 figures.