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Illustration 31
AFM
answered on 07-Jun-26 13:26
Sir, if a derivative contract is held till maturity, is squaring off required, or does settlement take place automatically on the expiry/maturity date? [Video Time Stamp: 16:33]
latest answer
If u don’t square off on your own Sometimes exchange may enforce the contract by asking you to deliver / take delivery for stock options
Mhd Mmp
CA Final
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78
Provision for Bad debts
AFM
answered on 06-Jun-26 14:58
Sir, the question mentions that "Bad debt Provision of Rs. 40 Lakhs is included in indirect expenses and Rs. 40 Lakhs reduced from receivables in current assets." Since 40 Lakhs has to be reduced from Receivables, it must be a pre-tax provision. Can we infer this way sir? [Video Time Stamp: 00:25]
latest answer
Yes you can
SANJITHA
CA Final
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macaulay duration
AFM
answered on 06-Jun-26 15:49
sir this denominator 100 means facevalue of bond 100 (macaulay duration excel working) [Video Time Stamp: 15:01]
latest answer
Yes
saipriya v
CA Final
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91
Illustration 30
AFM
answered on 05-Jun-26 22:40
Sir while computing value of u and d why consider denominator as investment value rather the present value of 250 [Video Time Stamp: 05:20]
latest answer
Because 250 per year is value of current savings per year and that is irrelevant. When you look at risk neutral method for financial options also, you are indifferent to gap between current spot and strike. You are only bothered abt future spot and strike. Same logiic applies here too
Mhd Mmp
CA Final
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79
doubt
AFM
answered on 03-Jun-26 21:18
sir can you explain how beta is calculated in a broad manner and also what are the values provided in excel sheet like R. R^2.etc. [Video Time Stamp: 12:30]
latest answer
Please go through excel sheet . It is available for download and all formulae are available there for your to check on your own
pavan kumar
CA Final
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95
doubt
AFM
answered on 03-Jun-26 20:00
what is CAGR and how it is computed [Video Time Stamp: 18:39]
latest answer
Thank you sir for your clarification.
pavan kumar
CA Final
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2
192
Doubt
AFM
answered on 03-Jun-26 13:32
sir for year -2 discounted faactor is 0.826. [Video Time Stamp: 02:12]
latest answer
Yes 0.826 x 11000 = 9090
pavan kumar
CA Final
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94
EMA
AFM
answered on 04-Jun-26 10:42
Sir I really understood well the way you took this topic on moving average. I need a little clarity on why that exponent is considered and what is the need for the exponent. I understood how it was computed but why that particular exponent. Could you please help me on that
latest answer
Thank you sir
Bharathkumar Sivakumar
CA Final
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144
Illustration 18
AFM
answered on 02-Jun-26 17:01
Sir, I have a doubt regarding Part II of the question. In the solution, the closing portfolio value is shown as ₹225. However, initially, the value of the shares held was ₹250 (500 shares × ₹0.50). Could you please explain the reason for this difference? My understanding is that the reduction from ₹250 to ₹225 may be due to the value of the option considered at the beginning, which reduces the overall portfolio value. Is this interpretation correct? I also have another doubt regarding hedging through the sale of a call option. If the share price falls, the maximum gain from the derivative position is limited to the option premium received. In such a situation, how does the hedge effectively protect the portfolio against the decline in the share price? Could you please explain the hedging logic in this case? [Video Time Stamp: 21:31]
latest answer
We purchased 0.50 shares At 500 I.e we spend 250 When share price falls to 450 value of shares held by us comes down to 225 Portfolio value is same irrespective of upmove or downmove of shares If shares move down as you said option is worthless and premium is gain. But value if shares is 225 If shares move up option is -100 and shares are 325 - next 225 In either case value of portfolio of ( 0.5 shares - call) = 225 at end of the period PV of this portfolio is 250- c = PV of 225 so C = 35.71 In this example we are trying to find out value of call option i.e premia - so you cannot again assume premia received in value of portfolio when share prices comes down
Mhd Mmp
CA Final
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133
illustartion 22
AFM
answered on 01-Jun-26 14:44
sir how this eps 30/- is calculated out of capitalisation rate and CMP? [Video Time Stamp: 06:00]
latest answer
Eps / cap rate = cmp Eps / 20% =150 Eps = 30
saipriya v
CA Final
★ 510
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77