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Example

AFM

answered on 31-Mar-26 07:27

Please provide us one numerical practice example related to this. (if possible) [Video Time Stamp: 00:06]

latest answer

Pricing is just like a bond. You determine a yield and the price the security From borrower perspective if int rate of alternative borrowing 5% he would want a similar rate here . He may sacrifice some yield if quality of assets is high and risk of default is low. If rating is poor the he may want a higher yield

Vinod Kumawat

Vinod Kumawat

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205

illustration 2

AFM

answered on 30-Mar-26 15:19

sir is it year 0 and year 1 with respect to construction period, why we take ticket price 220 in year 0.actually period of operations starts from year 2 onwards. [Video Time Stamp: 18:56]

latest answer

It is a slightly weird assumption that Ticket price off 220 that is given in the question is for Year zero when no specific mention abt the same has been made in the question. This is how ICAI has solved it - while we can use our judgement and correct it. I am embarrassed to say that ICAI will not award marks for a logical approach by student when they have followed an illogical approach in their Study material 😔

saipriya  v

saipriya v

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192

Cross Rates - Illustration 9

AFM

answered on 30-Mar-26 18:59

Why are we considering Ask rate for GBP SGD as the base currency for that transaction will be pound. [Video Time Stamp: 40:19]

latest answer

Ok. No worries. happy to help

Vidyashree Anand

Vidyashree Anand

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125

Short cut step for exam - use during reading of question

AFM

answered on 30-Mar-26 08:13

1.Change = old - new / old , compare with % of CM policy 2. if less then igone ,otherwise allocate in cm ratio .. 3 Nos = Allocated Amount / New Price Imp. Note before rebalancing debts will same, and after balancing Port. value will same. [Video Time Stamp: 40:24]

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Yes

Vinod Kumawat

Vinod Kumawat

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119

Ratios of shares to be exchanged

AFM

answered on 30-Mar-26 07:35

In question they have given " a share for share exchange" i.e 1lakh of shares of C ltd to be exchangd with 1 lakh shares of B ltd is what I assumed. WHy are we taking MP as ratio base. Kindly explain. [Video Time Stamp: 13:14]

latest answer

Share to share

Kiruthika Senthilkumar

Kiruthika Senthilkumar

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204

illustarion no 1 international financial management

AFM

answered on 30-Mar-26 07:28

sir why we take working capital adjustment amount as 70/- in year 5 [Video Time Stamp: 40:54]

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Wc

saipriya  v

saipriya v

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110

terminal cashflow

AFM

answered on 29-Mar-26 16:53

can u please explain more clearly about terminal cashflow ???

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It is pv of all cash flows from a year till infinity We use sum of GP till infinity formula D1/(ke-g) Similar to what we taught in security valuation equities for Gordon growth model

Hemanth kumar Kapuluru

Hemanth kumar Kapuluru

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102

Doubt regarding Buy Forward and Sell Forward

AFM

answered on 29-Mar-26 04:51

Sir have doubt regarding when to Buy Forward and when to Sell Forward? Suppose in this problem if Ideal DM/CAD forward for 3 months is .680 (Costly) and Actual DM/CAD forward for 3 months is .670 (Cheap) What then 1st step is what? (whether Buy forward or sell forward)

latest answer

Buy what is cheap if forward is cheap buy it

G Chandrakanta

G Chandrakanta

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111

Spot and forward

AFM

answered on 28-Mar-26 20:57

Sir please explain the difference between 3 months Spot and 3 months Forward.

latest answer

Understood sir, Thank you.

G Chandrakanta

G Chandrakanta

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127

Computation of e

AFM

answered on 26-Mar-26 16:43

Good day Sir! In case they have not given the value of e in exam, can we compute that on the calci like how you have taught in one of the introductory videos and use that? or is it compulsory to use the simple interest method of computation. We can also give a note of the same computation right? [Video Time Stamp: 05:24]

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Depends on the question If they say use continuous compounding and do not provide value of e then use the calculator trick else use other methods

Varshini Rao

Varshini Rao

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116