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Dividend payable before expiry
AFM
answered on 15-May-25 22:04
Hi sir, in this sum we have taken 3 months roi but pa dividend. I assume that dividend should be taken on prop basis (ie) 3m dividend since mere payment is happening during the option period but div is accrued over the years.
latest answer
No in real world for a stock div is not accrued over a year, it is only paid on specific days But for an index with multiple stocks each stock may be paying div in diff months in which case we can treat div yield as accruing over the year
Dhanushree Shanmugam
CA Final
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291
Computation of IRR
AFM
answered on 14-May-25 21:11
Sir, Can you please clarify the following point: Can I assume that we have received the initial inflow on short selling of Rs. 56,000 on Day-0 and paid 45,000 for the purchase of shares on year end, and consider the same for IRR computation instead of Net amount of 11,000/- on year end??
latest answer
Yes but u have to consider all other expenses also I explained in last 2 minutes
Chaitanya Sai Gupta
CA Final
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271
Delta Hedging Method
AFM
answered on 14-May-25 13:17
Can you please simplify how we used the Delta Hedging Method to solve this illustration?
latest answer
Delta hedging
Ruthvik Reddy Adala
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302
Illustration 27 - Timing option (MIS ltd)
AFM
answered on 15-May-25 21:31
Here, while computing PV of inflows, why are we dividing it by 0.1. Should we not divide it by 1.1?
latest answer
Got it sir, thankyou
Dhanushree Shanmugam
CA Final
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270
Portfolio Management-Phases
AFM
answered on 13-May-25 07:54
Sir, how can we revise a portfolio without first evaluating how the current securities are performing? Since evaluation helps identify what’s working and what’s not, wouldn’t it logically come before revision? What is the reasoning behind placing 'Portfolio Revision' before 'Portfolio Evaluation' in the sequence.
latest answer
Portfolio analysis is done which considers what is working and what is not Portfolio evaluation is done after that
Murali Thripuraboina
CA Final
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249
Variance & SD of Cash Flows
AFM
answered on 12-May-25 15:59
In the case of computing variance when probability %,why didn't you considered the mean of Probable cash flows.
latest answer
When we have probability mean is computed as expected value which is sum of prob x respective values at that probability
Harini Desu
CA Final
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235
Value at Risk
AFM
answered on 12-May-25 09:40
Sir, can you please explain what the 1-day and 10-day VaR actually indicate? Some Interpretation on it.
latest answer
Thank you sir
Murali Thripuraboina
CA Final
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294
Asset beta
AFM
answered on 11-May-25 21:50
Sir, does the asset beta remain constant irrespective of change in debt equity ratio or we are assuming it is constant to find the equity beta
latest answer
Understood sir
Nitin Raj
CA Final
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292
Variance and SD
AFM
answered on 11-May-25 12:19
Sir, while calculating variance, we square the deviations from the mean. I understand this is done partly to avoid negatives, but I want to know where does the effect of squaring go? I know that we take the square root while calculating standard deviation, but since squaring is applied to each individual deviation and square root is applied only after averaging, does that mean the impact of squaring is not fully cancelled out in standard deviation? Could you please explain this?
latest answer
Squaring effect is cancelled out when we do sq rt of avg If u need to understand these concepts in greater depth you will have to do a bsc stats For now what I have explained is sufficient
Murali Thripuraboina
CA Final
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314
Floor
AFM
answered on 11-May-25 12:13
Why we take Libor only instead of Libor Plus 2% because the floor fixed upto 8.5% i.e Bank can face upto 8.5%, So bank will get 8.4%+2% = 10.4% which is not loss but above floor rate. if Libor = 6.4% then 6.4%+2%=8.4% which is under the floor 8.5% remaining 0.1% should compensate or else the bank will get that 0.1%. I need this clarification sir, will we consider only Libor or Libor + 2% with strike rate?
latest answer
Swaps are always for the variable rate and not for spread explained in one of the lectures
Alekya Bandaru
CA Final
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