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Afm theory
AFM
answered on 12-Aug-24 06:42
Does afm theory alone available for purchasing classes
latest answer
Regret no
Jaswanth Sai
CA Final
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1
389
Bond refunding decision sum
AFM
answered on 12-Aug-24 09:42
Sir in this question in icai sm.....they have not given any discount rate for discounting annual net cashflow...but in answer they have considered 7%. Is there any way to calculate it?.
latest answer
Thank you sir. Understood
Jaswanth Sai
CA Final
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2
353
ill15
AFM
answered on 11-Aug-24 20:59
Sir in this question the investment 2 Rs.95.25 computed as balance investment (142-44.75)is not actually sold right ? why we deducted that value ?
latest answer
initial investment is 140 lacs it has 2 parts 44.75 & 95.25 44.75 is sold at 47 lacs and reinvested we deducted 44.75 from 140 in order to arrive at value of balance investments that can be used to compute cash balance
HEMAVATHYSUBRAMANI SUBRAMANI
CA Final
★ 3K+
1
328
NAV
AFM
answered on 11-Aug-24 19:12
why in this answer , the opening NAV of Jan and Feb is same, as in question the income for jan is given.
latest answer
nav is not same. for purposes of computation of repurchase price it is clearly specified in teh question that that repurchase price is Jan Opening NAV +/- Div eq -Exit load
Sai Vema
CA Final
★ 108K+
1
297
Why depreciation constant Impact is not considered for the cashflows in illustration 1, chapter advanced capital budgeting decisions
AFM
answered on 08-Aug-24 12:32
In the Illustration 1, for year 0 cash flow is Rs 15000, for year 1 nominal cash flow is considered Rs 16,500(15000*1.10), Isn't the concept of constant depreciation is vioalted by doing so, i.e in the 1st year considering the inflation a) Revenue Rs 33,000, b) Cost Rs 11,000 c) depreciation Rs 10,000, d) EBIT Rs 12,000, e) 50% Tax Rs 6,000 f) PAT = Rs 6,000. hence CFAT = PAT + Depreciation = Rs 6,000 + Rs 10,000 = Rs 16,000 and not Rs 16,500.......... Same way with the subsequent years
latest answer
It is a bad question by ICAI actually and you are right - if we use historical cost convention to value assets then dep is also based on historical cost - we should not inflate CFAT with nominal rate but all P&L items with nominal rates - better way to solve this is using real cash flows and real rates In real life you have both capex and dep happening every year; also repairs and maintenance happens every year where amount incurred is in nominal terms, so expenses get adjusted automatically as cost of assets or r&m expense also keeps going up.
Hemachandra D
CA Final
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333
Doubt on variance formula
AFM
answered on 06-Aug-24 05:57
Why we have not taken Sigma(x- xbar)square/n in the variance formula. Why we have taken just x-xbar square.. Illustration-6 Risk management AFM- CA FINAL
latest answer
When probabilities are given, then you multiply each of the difference between X minus X mean whole square with respective probability, you do not have to gain divide by the number of observations. That is the formula.
surya sai Karnatakam
CA Final
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393
answer doubt
AFM
answered on 04-Aug-24 12:27
sir in ill26 and ill 27 both are same question then why differenet methods we computed r in ill26 we computed WA return but ill27 portfolio return. can for ill26 also we can compute like we computed on ill27 ? what is the difference in the both the question
latest answer
in Q 26 Rf is not given but it is given in 27 in 26, Average return of portfolio is given but it is not given in 27 Both questions have similar data but input data provided is different in 26 we are given portfolio return and used it as proxy for market return - we did same in 27 also In 27 we computed average return but did not use it anywhere please read both Q carefully
HEMAVATHYSUBRAMANI SUBRAMANI
CA Final
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275
CTD Bond
AFM
answered on 01-Aug-24 05:41
seller has choice to give bond which is minimium loss of 80 also know? whether i can use word "or" (seller has choice to give highest gain or minimium loss) this is type of recommandation is accepted in exam
latest answer
Yes
Hariharan S
CA Final
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6
276
H model - Equity
AFM
answered on 28-Jul-24 13:39
Sir, if we solve this illustration using two stage model price is arrived at Rs. 123.86. Meanwhile using H model it is Rs. 127.88. Is it okay to solve using discount model?
latest answer
Unless they ask for H model use it stage DDM ONLY
Durai Murugan
CA Final
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384
Covexity Concept
AFM
answered on 28-Jul-24 19:30
Sir why in this illustration(51) you are multiplying 1/2 or 0.5 because you said 0.5 will come for convexity and not for price change similar in in illustration 50 also we haven't multiplied 0.5
latest answer
sorry. ps chk now https://1fin.link/forum/adc65eb9311c49ca8108d474dacf2cae
Bhoomesh Velan
CA Final
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3
481