Hi Vinit, This 2 questions are a bit tricky. You need to be careful while reading the question, 1st one speak about the covariance b/w security price & MU which is -ve, formula is E(P1) - Cov{E(P1), MU} 2nd question is talking about the correlation b/w asset return & future consumption durinRead more
Hi Vinit,
This 2 questions are a bit tricky. You need to be careful while reading the question, 1st one speak about the covariance b/w security price & MU which is -ve, formula is E(P1) – Cov{E(P1), MU}
2nd question is talking about the correlation b/w asset return & future consumption during bad times i.e., when ERP demanded by a risk averse investor is high & asset return is low so the correlation is +ve
The key point to remember is, they’re talking about future consumption & not Marginal utility of future consumption, MUfc & asset return has a -ve correlation and, not fc & asset return.
I hope this will help you in understanding. Thank you!
Hello, Arka Violation of misconduct & misrepresentation are hypothetical. Read the statement carefully, it says, if Mehta would have stated that he had years of experience working in India, then it would have been a violation, bc prior to this assignment he has not worked in India. Pardon me ifRead more
Hello, Arka
Violation of misconduct & misrepresentation are hypothetical. Read the statement carefully, it says, if Mehta would have stated that he had years of experience working in India, then it would have been a violation, bc prior to this assignment he has not worked in India.
Pardon me if I went wrong anywhere in explaining. Thank you!
It shall be overfitting, I think there is a printing mistake. Feature Selection is done to deal with overfitting whereas, feature engineering is done to deal with underfitting.
It shall be overfitting, I think there is a printing mistake.
Feature Selection is done to deal with overfitting whereas, feature engineering is done to deal with underfitting.
Saumya if you consider the current scenerio than you must be aware the floating rate borrowers suffered due to a sudden spike in the rates and what I think is this, as rates will hike Greece liability towards EU will rise as it has to pay a higher amount as interest and knowing the fact that EU hadRead more
Saumya if you consider the current scenerio than you must be aware the floating rate borrowers suffered due to a sudden spike in the rates and what I think is this, as rates will hike Greece liability towards EU will rise as it has to pay a higher amount as interest and knowing the fact that EU had already bailed out Greece a decade ago there is a hope that if rates rise and Greece fails to make a higher int payment EU will once again bail out Greece.
Hi Yash, 1) Gamma for near term options are higher bc delta of near term options are higher and the reason for this is that, as you approach maturity the impact on your portfolio due to change in price of stocks increases and the rate of change of delta is determined by Gamma so, if you think inversRead more
Hi Yash,
1) Gamma for near term options are higher bc delta of near term options are higher and the reason for this is that, as you approach maturity the impact on your portfolio due to change in price of stocks increases and the rate of change of delta is determined by Gamma so, if you think inversely you can understand that maturity ke just pehle delta active ho jaega ache sae aur uska speed gamma btata h toh that will also be high.
2) Delta neutral is always a one minute satisfaction bc as share price moves a delta neutral portfolio becomes non-neutral.
Also, as share price moves your portfolio will be affected unless you actively keep making your portfolio delta neutral from time to time.
Hi Saumya, The explanation is simple, it says that a decade ago EU institutions had bailed out Greece so if interest rate rises again Greece's debt will not be exposed to it much knowing the fact that EU may once again bailout Greece and so Debt/GDP ratio will fall more than Italy's Debt/GDP I hopeRead more
Hi Saumya,
The explanation is simple, it says that a decade ago EU institutions had bailed out Greece so if interest rate rises again Greece’s debt will not be exposed to it much knowing the fact that EU may once again bailout Greece and so Debt/GDP ratio will fall more than Italy’s Debt/GDP
Hi, At this stage the only thing you can do is to stay calm & composed as Sir says. You have your exam due day after tom so be relaxed. You have work hard & now just don't pressurise yourself. Have fun & give your exam nicely. All the best to you!
Hi,
At this stage the only thing you can do is to stay calm & composed as Sir says. You have your exam due day after tom so be relaxed. You have work hard & now just don’t pressurise yourself.
Have fun & give your exam nicely. All the best to you!
Hi, At this stage the only thing you can do is to stay calm & composed as Sir says. You have your exam due day after tom so be relaxed. You have work hard & now just don't pressurise yourself. Have fun & give your exam nicely. All the best to you!
Hi,
At this stage the only thing you can do is to stay calm & composed as Sir says. You have your exam due day after tom so be relaxed. You have work hard & now just don’t pressurise yourself.
Have fun & give your exam nicely. All the best to you!
Hi, At this stage the only thing you can do is to stay calm & composed as Sir says. You have your exam due day after tom so be relaxed. You have work hard & now just don't pressurise yourself. Have fun & give your exam nicely. All the best to you!
Hi,
At this stage the only thing you can do is to stay calm & composed as Sir says. You have your exam due day after tom so be relaxed. You have work hard & now just don’t pressurise yourself.
Have fun & give your exam nicely. All the best to you!
Portfolio Management – Intertemporal Rate of Substitution
Hi Vinit, This 2 questions are a bit tricky. You need to be careful while reading the question, 1st one speak about the covariance b/w security price & MU which is -ve, formula is E(P1) - Cov{E(P1), MU} 2nd question is talking about the correlation b/w asset return & future consumption durinRead more
Hi Vinit,
This 2 questions are a bit tricky. You need to be careful while reading the question, 1st one speak about the covariance b/w security price & MU which is -ve, formula is E(P1) – Cov{E(P1), MU}
2nd question is talking about the correlation b/w asset return & future consumption during bad times i.e., when ERP demanded by a risk averse investor is high & asset return is low so the correlation is +ve
The key point to remember is, they’re talking about future consumption & not Marginal utility of future consumption, MUfc & asset return has a -ve correlation and, not fc & asset return.
I hope this will help you in understanding. Thank you!
See lessForward commitments(Derivatives)
Hi Himanshu, why will we consider AI(t)? It's clearly mentioned that there is no accrued interest, so, there will no AI(t). I hope this helps you!
Hi Himanshu, why will we consider AI(t)?
It’s clearly mentioned that there is no accrued interest, so, there will no AI(t).
I hope this helps you!
See lessCouldn’t spot the violation here
Hello, Arka Violation of misconduct & misrepresentation are hypothetical. Read the statement carefully, it says, if Mehta would have stated that he had years of experience working in India, then it would have been a violation, bc prior to this assignment he has not worked in India. Pardon me ifRead more
Hello, Arka
Violation of misconduct & misrepresentation are hypothetical. Read the statement carefully, it says, if Mehta would have stated that he had years of experience working in India, then it would have been a violation, bc prior to this assignment he has not worked in India.
Pardon me if I went wrong anywhere in explaining. Thank you!
See lessCh-Big data; Underfitting
It shall be overfitting, I think there is a printing mistake. Feature Selection is done to deal with overfitting whereas, feature engineering is done to deal with underfitting.
It shall be overfitting, I think there is a printing mistake.
Feature Selection is done to deal with overfitting whereas, feature engineering is done to deal with underfitting.
See lessFixed Income
Saumya if you consider the current scenerio than you must be aware the floating rate borrowers suffered due to a sudden spike in the rates and what I think is this, as rates will hike Greece liability towards EU will rise as it has to pay a higher amount as interest and knowing the fact that EU hadRead more
Saumya if you consider the current scenerio than you must be aware the floating rate borrowers suffered due to a sudden spike in the rates and what I think is this, as rates will hike Greece liability towards EU will rise as it has to pay a higher amount as interest and knowing the fact that EU had already bailed out Greece a decade ago there is a hope that if rates rise and Greece fails to make a higher int payment EU will once again bail out Greece.
I hope now it’s clear to you!
See lessOption Greeks – Gamma
Hi Yash, 1) Gamma for near term options are higher bc delta of near term options are higher and the reason for this is that, as you approach maturity the impact on your portfolio due to change in price of stocks increases and the rate of change of delta is determined by Gamma so, if you think inversRead more
Hi Yash,
1) Gamma for near term options are higher bc delta of near term options are higher and the reason for this is that, as you approach maturity the impact on your portfolio due to change in price of stocks increases and the rate of change of delta is determined by Gamma so, if you think inversely you can understand that maturity ke just pehle delta active ho jaega ache sae aur uska speed gamma btata h toh that will also be high.
2) Delta neutral is always a one minute satisfaction bc as share price moves a delta neutral portfolio becomes non-neutral.
Also, as share price moves your portfolio will be affected unless you actively keep making your portfolio delta neutral from time to time.
I hope the above explanation helps you!
See lessFixed Income
Hi Saumya, The explanation is simple, it says that a decade ago EU institutions had bailed out Greece so if interest rate rises again Greece's debt will not be exposed to it much knowing the fact that EU may once again bailout Greece and so Debt/GDP ratio will fall more than Italy's Debt/GDP I hopeRead more
Hi Saumya,
The explanation is simple, it says that a decade ago EU institutions had bailed out Greece so if interest rate rises again Greece’s debt will not be exposed to it much knowing the fact that EU may once again bailout Greece and so Debt/GDP ratio will fall more than Italy’s Debt/GDP
I hope this explanation helps you!
See lessCFA Mock Exam
Hi, At this stage the only thing you can do is to stay calm & composed as Sir says. You have your exam due day after tom so be relaxed. You have work hard & now just don't pressurise yourself. Have fun & give your exam nicely. All the best to you!
Hi,
At this stage the only thing you can do is to stay calm & composed as Sir says. You have your exam due day after tom so be relaxed. You have work hard & now just don’t pressurise yourself.
Have fun & give your exam nicely. All the best to you!
See lessCFA Mock Exam
Hi, At this stage the only thing you can do is to stay calm & composed as Sir says. You have your exam due day after tom so be relaxed. You have work hard & now just don't pressurise yourself. Have fun & give your exam nicely. All the best to you!
Hi,
At this stage the only thing you can do is to stay calm & composed as Sir says. You have your exam due day after tom so be relaxed. You have work hard & now just don’t pressurise yourself.
Have fun & give your exam nicely. All the best to you!
See lessCFA Mock Exam
Hi, At this stage the only thing you can do is to stay calm & composed as Sir says. You have your exam due day after tom so be relaxed. You have work hard & now just don't pressurise yourself. Have fun & give your exam nicely. All the best to you!
Hi,
At this stage the only thing you can do is to stay calm & composed as Sir says. You have your exam due day after tom so be relaxed. You have work hard & now just don’t pressurise yourself.
Have fun & give your exam nicely. All the best to you!
See less