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Beta computation
AFM
answered on 02-Jul-25 11:17
Sir, Here Change in portfolio % is (260L-256.168L)/260L = 1.4736 % and change in futures % is (130L-128.3286L)/130L = 1.2856% Beta = Change in Portfolio % / change in future % so 1.4736/1.2856 = 1.1465 2nd way Beta = [(117.84*1.4) + (10*0) + (128.3286 * 1)] / (117.84 + 10 + 128.3286 ) = 293.3046 / 256.1686 = 1.1465 please help me to clarify i am bit confused in 2nd part [Video Time Stamp: 13:40]
latest answer
Beta is computed as below
Sai Akshith
CFA L1
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HEDGING
AFM
answered on 01-Jul-25 21:35
instead of settling in cash, if the farmer simply delivers the actual product to the buyer at the agreed futures price, the economic outcome seems the same — the buyer gets the product at the contract price, and the farmer bears the same loss. IF he deliver goods : MARKET PRICE=200 CONTRACT PRICE=180 LOSS=20 If it cash settlement : Cash outflow = -20 market price = 200 ( if he sells to others) Net cashflow=180 So why does the farmer choose cash settlement instead of directly selling the product at the futures contract price?
latest answer
thank you sir
Muhammed Mubaris
CA Final
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241
Regarding RADR Formula explanation
AFM
answered on 29-Jun-25 13:22
why we are adding the Risk free return rate with risk premium rate, instead of multiplying the both by adding 1 to the rate ? As per your explanation related to nominal rate calculation, to add interest rate we should use multiplication and to subtract should use division. i.e. (1+RADR) = (1+7%)(1+7%) (1+RADR) = 1.1449 RADR = 14.49% Is the above calculated RADR correct or not ? [Video Time Stamp: 00:18]
latest answer
Okay... Thank you Sir
Swetha Selvam
CA Final
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Beta
AFM
answered on 27-Jun-25 21:33
Sir, Generally for considering Beta of a security market is considered as base But in this question what is the base for considering Asset beta and Debt beta can u explain this [Video Time Stamp: 04:54]
latest answer
Asset beta
P.udaykumar Pasupulati
CA Final
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310
question
AFM
answered on 26-Jun-25 17:57
sir can you post a video of solving this sum
latest answer
Available in videos already Pls search in book pdf for Sunidhi U will get illustration number and check that in videos
P AKSHAYA
CA Final
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1
276
Illustration 45
AFM
answered on 25-Jun-25 17:43
Sir, in Illustration 45, the method used to find Beta seems to be the best approach. So should we follow the same method for Illustration 5 and 15 as well? It looks easier and more accurate bcz the share price already given average basis. [Video Time Stamp: 00:48]
latest answer
I suggest u stick to ICAI method which I have explained in class because they tend to give marks only if u follow their method
Muhammed Mubaris
CA Final
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314
What if the correlation is negative value
AFM
answered on 26-Jun-25 13:51
Sir if the Correlation is Less than or equal to 20% - weakly efficient. Does that also include, if the correlation is negative value still the market is weakly efficient or A negative correlation(eg,-0.20, -0.35) in returns suggests reversal patterns and makes the market inefficient [Video Time Stamp: 00:02]
latest answer
Same explanation as positive correlation except for aign
Shinisha Rose R
CA Final
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Clarification required with respect to Dividend computation (Ills 18 vs Ills 19)
AFM
answered on 24-Jun-25 17:02
In Illustration 18, Dividend = Spot × Yield Rate × 50% of Investment = 13,800 × 50% of investment x 4.8% = 331.20 In Illustration 19, Dividend = Spot × Yield Rate × t = 1,195 × 3% × (91/365) = 8.9379 Sir, could you please clarify when we should include the time factor “t” while computing dividends? [Video Time Stamp: 04:48]
latest answer
In Q 18 please read carefully - Q says 50% of stocks will pay dividdend so they will pay full dividend and not half dividend. hence we took 50% of investment x full div yield of 4.8% In Q 19 we did same thing but in as as we have been provided exact dates so we did 3% x 91/365 Depends on question whether you use days or month or year convention but whatever you do time has to definitely be accounted for
Seema Jain
CA Final
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278
Exchange Ratio
AFM
answered on 22-Jun-25 19:25
If CMP of A is 42 and B is 28, exchange ratio is 42:28. But I find that confusing — can I write 28:42 and mention ‘28 shares for every 42 held’? Is that okay in exams? [Video Time Stamp: 02:18]
latest answer
Mention 28 for every 42 shares No need to use any ratio at all u will not lose any marks
Manikyam
CA Final
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346
PORTFOLIO
AFM
answered on 22-Jun-25 13:06
Sir, In the above classes you told to take x as independent, y dependent the same here market return is independent right why is it considerd as Y
latest answer
Beta
P.udaykumar Pasupulati
CA Final
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213