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Free float SH
AFM
answered on 29-Apr-26 21:13
can we do directly - (28.27-17.5)* 69.57= 782.68 [Video Time Stamp: 15:42]
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Ok sir ji
Vinod Kumawat
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Call option
AFM
answered on 28-Apr-26 18:29
Sir, it is mentioned in the question that 'a call option has been entered into by Arnav for delivery of share of X Ltd. at Rs. 460', does it mean that he will be delivering share at maturity and can we interpret it as a sell call option. [Video Time Stamp: 05:00]
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It has to be read along with last like any break even If u sell a call u r not really bothered abt break even
SANJITHA
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116
Minimum Loss
AFM
answered on 28-Apr-26 18:30
Sir, When market price is less than 950, he earns net pay-off of Rs. 942 (premium - 8). The minimum loss he can afford is 50, so he expects atleast Rs. 950. Should the net payoff also cover for the premium cost of Rs. 8 to hold his expectation? [Video Time Stamp: 06:07]
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Agree with u as it is logical. But icai chose not to compute net payoff but look at gross level
SANJITHA
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Option Price
AFM
answered on 28-Apr-26 14:13
Sir, Option price = PV of expected pay-offs of the option, does the pay-off here represents the pay-off for the buyer. So the price is based on how much the buyer is willing to pay for his return. [Video Time Stamp: 10:10]
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Ye Buyers Expected return itself is what he has to pay to seller for buying the option
SANJITHA
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Premium
AFM
answered on 28-Apr-26 11:54
Sir, whether premium is fixed on whole for a option contract or fixed for each unit of underlying asset as in this question? [Video Time Stamp: 08:31]
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Premia is fixed per share i.e each underlying unit because we compare premia with underlying asset's price. We do not look at premia from lot size / contract perspective
SANJITHA
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Doubt
AFM
answered on 27-Apr-26 17:01
If utilities are treated as weights, why are we not multiplying utilities to calculate expected cash flows?
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Utilities are not weights We are finding out EV of CF and EV of Utilities and using that to make a decision
pavan kumar
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109
doubt
AFM
answered on 27-Apr-26 16:57
Please tell us the difference between probability and certainty equivalent. [Video Time Stamp: 00:06]
latest answer
Certainty Equivalent CF is a Cash Flow that you will accept instead of an expected CF if probability weighted CF is 1000 ( 50% x 0 + 50% x 2000) you as an individual are ok to accept 800 instead of this uncertain CF which has Expected value of 1000 CE = 800/2000 = 40% Refer page 3.23 https://resource.cdn.icai.org/87844bos-aps2163-ch3.pdf
pavan kumar
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112
Doubt
AFM
answered on 27-Apr-26 16:51
Probability is always less than 1. How did we get 2.4 in project M?. For answering question (ii), why we are not using the RADR method. [Video Time Stamp: 10:12]
latest answer
Sum of Certainty equivalent is not equivalent to total probability. Certainty equivalent for a period gives probability of a specific cash flow for a specific period
pavan kumar
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Doubt
AFM
answered on 27-Apr-26 16:48
In the given question, we are computing NPV and comparing it with the acceptable level of risk of 20%.This is in % and the risk is in percentage terms. [Video Time Stamp: 27:50]
latest answer
We are comparing risk of 20% with 30% of poor state of economy. It is a poorly worded question by ICAI
pavan kumar
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Doubt
AFM
answered on 27-Apr-26 13:53
please tell us where to use IRR and Cost of capital for discounting. State some difference between them sir. [Video Time Stamp: 12:30]
latest answer
Sorry NPV
pavan kumar
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