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inflation
AFM
answered on 03-Jun-24 13:47
Sir in this question, ICAI has not adjusted the inflation in each yrs revenue and costs. I understand you'd done it similar to an Illustration solved earlier but how do we interpret whether inflation rates are to be adjusted in the CFs (where real/ nominal is not mentioned)
latest answer
Have Updated this solution. Went through the question again made some reasonable assumptions based on which we can arrive at ICAI answer - Thanks for highlighting though
Priyanka Udeshi
CFA L1
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408
Mutual funds
AFM
answered on 07-May-24 05:47
Illustration 8 answer is not 12.64 it is 12.76(12/.94)
latest answer
No. Solution is correct. Please have a re look at formula and our notes P 590. Check icai material page 8.16 too https://resource.cdn.icai.org/74835bos60509-cp8.pdf
abin c s
CA Final
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427
interest rate collar
AFM
answered on 06-May-24 11:07
In this question if instead of Cap option, collar option was taken would that be more advantageous?
latest answer
I know. That was weird. You can state that in a collar you sell a floor. If floor is set at lowest rate the interest has gone to in the questions then floor will never be invoked When such a floor is sold, you receive premium That premium will reduce your outflow of 70 or 80 bps and If it that premium received is also 70 or 80 bps then the collar can become a zero cost collar
Priyanka Udeshi
CFA L1
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408
Bootstrapping
AFM
answered on 05-May-24 04:34
Request if you could help me to recollect where the bootstrapping formula (as used in this sum) was used in any earlier part/ chapter?
latest answer
Sec val fixed income spot rates forwardcrates
Priyanka Udeshi
CFA L1
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439
Calculation error
AFM
answered on 14-May-24 11:20
The cap and floor amounts have been mentioned interchanged columns and also the final total is coming at 1663698. Also, the ICAI soln in the enclosed pdf for the same sum have taken interest costs without considering 0.5% for dates 30-6-15 and 31-12-15. Please confirm if the same is an error or not?
latest answer
We have made the change in the video - thanks once again for highlighting
Priyanka Udeshi
CFA L1
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481
Exponent
AFM
answered on 04-May-24 19:46
`In calculating EMA for 12 days why a=2/(31+1) and why not 2/(12+1)?
latest answer
Because they said use 31 day EMA
shamanth rm
CA Final
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394
Premium on options - Forex
AFM
answered on 04-May-24 09:03
Which rate is applicable for premium payable on option contract - current spot rate or strike price ?
latest answer
Premium is paid upfront . So current spot is to be used for computation of premium if any
shamanth rm
CA Final
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465
FCFF
AFM
answered on 03-May-24 13:23
Why Interest is added back? Interest is non operating exp and we are taking cash flow from operations as a base, to calculate FCFF.
latest answer
Yes sir. As per US GAAP interest is operating but under IFRS IAS 7/Ind AS 7 , this is financing expense.
Mansha Tutlani
CA Final
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549
No of days for interest
AFM
answered on 03-May-24 07:42
For interest calcn, since Global ltd requested for delivery of remittance on 02 Mar, should the number of days taken be 30 or we consider 31 basis that the amt was received by Global ltd on 28th Feb. Although latter has been considered in solution, wanted to understand the logic in selecting dates
latest answer
For all boring or interesting computations we either include day of borrowing or day of repayment but not both. If u borrow on 1st Jan and repay on 31st Jan interest is computed for 1st Jan but not for 31st Jan Same way depeivery received on 28th feb instead of 31 dec So 28th he is considered and 30 days in next month so total 31 days
Priyanka Udeshi
CFA L1
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303
Why you did not reduce Dividend from return in 3rd part while computing NAV
AFM
answered on 02-May-24 17:17
Dear sir, while calculating NAV in part 1 . you reduced dividend from absolute return and added the amount to opening value of investment to find out the closing value of investment. But in 3rd part you did not reduced the dividend from the return while computing the closing value of investment. What is the reason ??
latest answer
Becuase closing value of investment is after dividend which is reinvested as shares units in MF hence you have to deduct Dividend to arrive at NAV at which dividends were reinvested and to find out exactly how many units are allotted
B. Dinesh
CA Final
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