Backwardation happens when S > F and contango happens when F > S If the market is trending upward that means price return will be high & Roll return will be positive in case of backwardation. So Index containing contracts in backwardation will give a higher return as compared to other IndeRead more
Backwardation happens when S > F and contango happens when F > S
If the market is trending upward that means price return will be high & Roll return will be positive in case of backwardation.
So Index containing contracts in backwardation will give a higher return as compared to other Index containing contracts in Contango.
If the answer is B then below is the solution for it Selling amount = 50mn/1.4201 = 35208788 Buying rate = 1.4155 - 0.00151 = 1.41399 Buying amount = 50mn/1.41399 = 35360929 Value = 35208788 - 35360929 = -152141 Mark to market value today = -152141/[1 + (0.008*0.25)] = -151837 Hope it helps
If the answer is B then below is the solution for it
Selling amount = 50mn/1.4201 = 35208788
Buying rate = 1.4155 – 0.00151 = 1.41399
Buying amount = 50mn/1.41399 = 35360929
Value = 35208788 – 35360929 = -152141
Mark to market value today = -152141/[1 + (0.008*0.25)] = -151837
If the spread on the bond was less than the CDS spread, it means that the bond is overpriced & accordingly we will sell the bond. Also, if we believe that both spreads will soon converge then we will sell CDS credit protection. Correct me if I am wrong.
If the spread on the bond was less than the CDS spread, it means that the bond is overpriced & accordingly we will sell the bond.
Also, if we believe that both spreads will soon converge then we will sell CDS credit protection.
I think k=1 because they have taken one independent variable whose change directly affects the change in the dependent variable. For instance, stock returns are directly affected by many factors such as financial statements, demand and supply of products in which the company deals in & so on. AlRead more
I think k=1 because they have taken one independent variable whose change directly affects the change in the dependent variable.
For instance, stock returns are directly affected by many factors such as financial statements, demand and supply of products in which the company deals in & so on.
Also, n-k-1 = n-2 shall be obtained of you insert k=1 & why k=1 is already in the above comment.
If we closely look at the solution they are deducting only working capital. But since the change in working capital is negative so when negative is multiplied by negative it got to be added. Correct me if I am wrong.
If we closely look at the solution they are deducting only working capital. But since the change in working capital is negative so when negative is multiplied by negative it got to be added.
Interpretation of Comment 2 by you is right as using the risk-neutral probability of default is higher than the actual probability due to uncertainty which has been considered by risk-neutral probability. Comment 3 is correct as CVA not only accounts for credit risk but also for liquidity premiumRead more
Interpretation of Comment 2 by you is right as using the risk-neutral probability of default is higher than the actual probability due to uncertainty which has been considered by risk-neutral probability.
Comment 3 is correct as CVA not only accounts for credit risk but also for liquidity premium & tax considerations.
Commodity return
Backwardation happens when S > F and contango happens when F > S If the market is trending upward that means price return will be high & Roll return will be positive in case of backwardation. So Index containing contracts in backwardation will give a higher return as compared to other IndeRead more
Backwardation happens when S > F and contango happens when F > S
If the market is trending upward that means price return will be high & Roll return will be positive in case of backwardation.
So Index containing contracts in backwardation will give a higher return as compared to other Index containing contracts in Contango.
Hope it helps.
See lessEconomics Currency
If the answer is B then below is the solution for it Selling amount = 50mn/1.4201 = 35208788 Buying rate = 1.4155 - 0.00151 = 1.41399 Buying amount = 50mn/1.41399 = 35360929 Value = 35208788 - 35360929 = -152141 Mark to market value today = -152141/[1 + (0.008*0.25)] = -151837 Hope it helps
If the answer is B then below is the solution for it
Selling amount = 50mn/1.4201 = 35208788
Buying rate = 1.4155 – 0.00151 = 1.41399
Buying amount = 50mn/1.41399 = 35360929
Value = 35208788 – 35360929 = -152141
Mark to market value today = -152141/[1 + (0.008*0.25)] = -151837
Hope it helps
See lessEquity Free cash flow
Book1 You can refer to the attached excel sheet
Book1
You can refer to the attached excel sheet
See lessFixed income duration
Is the answer B to the above question?
Is the answer B to the above question?
See lessCDS CFA Mock
If the spread on the bond was less than the CDS spread, it means that the bond is overpriced & accordingly we will sell the bond. Also, if we believe that both spreads will soon converge then we will sell CDS credit protection. Correct me if I am wrong.
If the spread on the bond was less than the CDS spread, it means that the bond is overpriced & accordingly we will sell the bond.
Also, if we believe that both spreads will soon converge then we will sell CDS credit protection.
Correct me if I am wrong.
See lessQM Regression Analysis
I think k=1 because they have taken one independent variable whose change directly affects the change in the dependent variable. For instance, stock returns are directly affected by many factors such as financial statements, demand and supply of products in which the company deals in & so on. AlRead more
I think k=1 because they have taken one independent variable whose change directly affects the change in the dependent variable.
For instance, stock returns are directly affected by many factors such as financial statements, demand and supply of products in which the company deals in & so on.
Also, n-k-1 = n-2 shall be obtained of you insert k=1 & why k=1 is already in the above comment.
Correct me if I am wrong
See lessFCFE calculation
If we closely look at the solution they are deducting only working capital. But since the change in working capital is negative so when negative is multiplied by negative it got to be added. Correct me if I am wrong.
If we closely look at the solution they are deducting only working capital. But since the change in working capital is negative so when negative is multiplied by negative it got to be added.
Correct me if I am wrong.
See lessValuation of Contingent Claims – Arbitrage Process
Is Answer "A" to above question ❓
Is Answer “A” to above question ❓
See lessBlackfriars Case Scenario
Interpretation of Comment 2 by you is right as using the risk-neutral probability of default is higher than the actual probability due to uncertainty which has been considered by risk-neutral probability. Comment 3 is correct as CVA not only accounts for credit risk but also for liquidity premiumRead more
Interpretation of Comment 2 by you is right as using the risk-neutral probability of default is higher than the actual probability due to uncertainty which has been considered by risk-neutral probability.
Comment 3 is correct as CVA not only accounts for credit risk but also for liquidity premium & tax considerations.
Hope it helps
See lessLogistic regression
I think it is being related to Probabilistic approaches which had been removed from CFA curriculum. Correct me if I am wrong
I think it is being related to Probabilistic approaches which had been removed from CFA curriculum.
Correct me if I am wrong
See less