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Different u & d for each stage
AFM
answered on 19-Apr-24 16:39
Sir, is it possible for each stage of the binomial tree to have different u & d? Thanks.
latest answer
If u & D are diff at each stage the p cannot be computed. U & D have to be constant through out for U of 1.2, D can 0.8 or 0.7 but D cannot be 0.8 for year 1 & 0.7 for year 2 - it has to be constant
Denz Philip
CA Final
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3
307
Forex
AFM
answered on 19-Apr-24 17:10
Any one can share Answer of 2nd part??
latest answer
Boot strap rates to arrive at rates for months 4-6 (1+12%/4) x (1+x%/4) = (1+11.5%/2) Solve this to get the value of x which will be the rate for months 4 to 6 - same way for both INR rates and USD rates
nazriya nasar
CA Final
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1
391
Portfolio management
AFM
answered on 19-Apr-24 12:07
Answer to 2nd part is not clear.. What is the variance value in that formula?? Also whats that 6??
latest answer
SD of risk free securities is 0
nazriya nasar
CA Final
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384
Doubt on the payment of interest difference
AFM
answered on 19-Apr-24 07:40
Sir, already lender will be in loss, 1.why he will pay back the interest difference to him? 2.if above question is wrong,then whether lender will receive back the ( P.V of interest difference which is paid on feb-1) on Apr-30 i.e 25000/- ?
latest answer
It is net cash settlement. Lender is in loss if he lends. Instead of lending and incurring a loss he pays the loss ie interest differential to borrower. Interest is usually paid at end of loan. Since he is paying interest at beginning of loan, he will pay PV of interest differential
Hanumanthu Rajesh
CA Final
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394
Depreciation
AFM
answered on 19-Apr-24 05:25
why havnt we considered the tax rate while adding back depreciation amount, ideally we should have considered the depn amt* tax rate (D*T) right?
latest answer
Page 3.2 formula 1 in the beginning https://resource.cdn.icai.org/74830bos60509-cp3.pdf When you compute PAT you have already subtracted depreciation to compute tax so you add back full Dep if you are computing EBIT (1-T) then you should add back Dep x T separately
Priyanka Udeshi
CFA L1
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1
532
Constant mix policy
AFM
answered on 19-Apr-24 05:26
ratio should be constantly in 50:50 (always) or investor's choice to decide ratio like 60:40 ?
latest answer
Investors Pref of 50 50 or 60 40 or what ever investor and advisor decide mutully
Hariharan S
CA Final
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312
Repo rate doubt
AFM
answered on 18-Apr-24 20:57
Is answer wrong on Interest calculation part as they Calculate interest accured on current market price ?
latest answer
Ha yes calculation error
Ravi Teja
CA Final
★ 20
2
490
Book value after merger
AFM
answered on 18-Apr-24 06:28
Sir we are issuing 1.48L shares for target co @ Fv of ₹100 each then how can we add directly add Share Capital as 200+100=300 and R&S as 900+600=1500. We have already issued 1.48L shares means SC should 3.48*100=348 instead of 300 please clarify sir
latest answer
Ok 👍 sir got it
kabilan sam
CA Inter
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2
497
Doubt on Exchange Margin
AFM
answered on 17-Apr-24 19:09
Sir Why we are reducing Exchange margin percentage from the new contract rate but the same we didn't reduced from the initial contract or original contract rate ? Could you please explain it sir?
latest answer
Ok sir. Tq
Hanumanthu Rajesh
CA Final
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2
481
Base case NPV
AFM
answered on 17-Apr-24 16:24
Slightly unclear as to why we took Rs. 110000 as the base case NPV in part 4 of the question, why should it not be INR 109000. Tried rewatching, but still in doubts.
latest answer
we took all 3 cases of npv( best , base, worst) & subtracted expected npv from eacg of them in variance computation we had computed best & worst earlier in part 2 so now computed base also
Priyanka Udeshi
CFA L1
★ 14K+
1
461