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Spread %

AFM

answered on 26-Mar-26 13:52

Sir i have doubt regarding Spread % calculation. As per ICAI, Spread % = Bid-Ask/Bid x 100 As per Formula sheet provided Spread % = Ask-Bid/Bid x 100 Is both are same sir? [Video Time Stamp: 07:31]

latest answer

Usually ask is greater than bid That is why we have formula like that You can take numbers for as diff between bid and ask

G Chandrakanta

G Chandrakanta

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165

Interest Component

AFM

answered on 26-Mar-26 12:32

Sir, In case of early actions, I understood the impact of interest component (that is. Planned flow of fund is only on due date, due to early action by customer, bank is in need of earlier than planned - so interest gets attracted for the unexpired period). With respect to after due date actions, however we are cancelling the contract as on due date itself, where it involves cashflow. Here, the cashflow happens on the planned date - then what is the logic behind interest component in this case, sir? [Video Time Stamp: 14:14]

latest answer

Bank is entering into a ODFC. So till that date they have to keep funds. If you ask for execution 2 days after due date then bank has to maintain funds idle for those 2 days

Swathi S

Swathi S

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151

method of calculation duration

AFM

answered on 25-Mar-26 19:49

sir can we use this formula in exam . is it also given by icai in any of suggested answer.? formula =1+y/y-...? [Video Time Stamp: 11:33]

latest answer

It is given in old practice manual I would not suggest that you use it

Vinod Kumawat

Vinod Kumawat

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134

market price increase by 75 bps , then we take -ve duration.? beacuse of inverse relation with current price.? or formula always negative.?

AFM

answered on 25-Mar-26 09:41

change in price in this question

latest answer

Duration

Vinod Kumawat

Vinod Kumawat

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111

Swap Ratios

AFM

answered on 23-Mar-26 19:14

Sir If the swap ratio is based on EPS (Where there is no synergy benefit), both acquirer and target companies do not lose money i.e.. Post merger EPS will be same as Pre merger EPS for both companies. Is this logic even apply for swap ratio is based on CMP? i.e.. if the swap ratio is based on CMP (Where there is no synergy benefit), both acquirer and target companies do not lose money i.e.. Post merger Market Capitalization will be same as Pre merger Mkt Cap for both companies?

latest answer

Yes

G Chandrakanta

G Chandrakanta

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167

Interest rate Vs. Exchange rate

AFM

answered on 22-Mar-26 19:10

Dear Sir, In this question, based on the Euro USD exchange rate, it is clear that Euro dominates USD. But when we come to given interest rates, Interest rate w.r.t Euro is higher than interest w.r.t USD. If Euro dominates USD means, interest rate of Euro should have been lesser than USD. Please, correct me if I m wrong. [Video Time Stamp: 03:19]

latest answer

Interest rates

Swathi S

Swathi S

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158

Part-1

AFM

answered on 23-Mar-26 14:00

Sir can we solve part-1 by following method also? Max exchange ratio acceptable to share holder of ABC- It means their MP price post merger should be at least CMP of Rs.24/- (assuming PE 8), so EPS should also be Rs.3/-. Post Merger EPS = Post Merger PAT/ Total Share count i.e. 3=1600/No of Shares So, Total No of Shares = 533.33 lakh shares Out of 533.33 lakh shares, existing shares of ABC are 400 lakh shares. So 133.33 lakh shares should be issued to XYZ (Swap ratio .667) Is approach correct sir? [Video Time Stamp: 10:54]

latest answer

Thank you sir

G Chandrakanta

G Chandrakanta

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171

EBIT METHOD

AFM

answered on 21-Mar-26 22:25

sir why we not consider tax benefit of interest expense [Video Time Stamp: 09:50]

latest answer

in FCFF we don not take interest. Cash flow is for all financers so interest is not deducted

Mhd Mmp

Mhd Mmp

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213

Notes

AFM

answered on 20-Mar-26 22:29

these detailed notes not shared with us for theory. [Video Time Stamp: 30:19]

latest answer

Unable to understand your exact point Pls tell me exact topic name of a specific which is there in ICAI material but not in notes

Vinod Kumawat

Vinod Kumawat

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170

After May 25 till Jan 26 please add all question with solutions discuss

AFM

answered on 19-Mar-26 16:34

Exam Question also include after May 2025 [Video Time Stamp: 00:04]

latest answer

Jan 26 questions will be added next week Sep 25 none are new or twisted questions

Vinod Kumawat

Vinod Kumawat

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145