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AFM | ACBD | Sensitivity Analysis
AFM
answered on 04-Sep-26 19:45
Suggesting faster way without solving equations to find % change where, NPV=0. Can be solved easily in 2 steps and time saving in exams [Video Time Stamp: 24:24]
latest answer
Good
Gobalakrishnan Manikandan
CA Final
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40
AFM | ACBD Illustration 22, part e. 10% reduction in Project life
AFM
answered on 04-Sep-26 15:29
Dear Sir, When the project life is reduced from 3 years to 2.7 years. Not only cash flows are reduced proportionately, the discounting period should also come down to 2.7 years right? We are discouting at 3 years (an additional 0.3 years (3.6 months) after the project is liquidated, for ease of computing right? Let me know if my understanding is wrong. Thanks
latest answer
Understanding is right but computation power 2.7 is tough and hence did not do that
Gobalakrishnan Manikandan
CA Final
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33
Residential status - illustration 9
Direct Taxation
answered on 11-Sep-26 11:27
In this question x was born in 1979 and his parents in nasik in 1950 and grandparents in Sydney. But he doesn't fall under exception . ? Undivided India means India before 1947. Suppose if the same question was like Mr x was born in 1999 his parents in 1979 India grandparents in 1955 India . So all in India . Will he be considered of Indian origin
latest answer
No. Either himself or any of his parents or any of his grand parents must be born in undivided India to be regarded as person of Indian Origin.
Vismaya A
CA Inter
★ 250
1
28
REFUND LIABILITY SUM IN IND AS 115
Financial Reporting
answered on 04-Sep-26 14:58
UNABLE TO UNDERSTND ENTRY OF RIGHT TO ASSET A/C DR COGS A/C DR TO INVENTORY A/V... [Video Time Stamp: 23:12]
latest answer
Assume cost of Goods is 50 for which sale value is 100. So cost of goods which will not be returned is 45 and cost of goods with customer is 5. So the entry would be Cost of goods sold Dr. 45 Inventory with customer Dr. 5 To Inventory 50
Suraj Prakash Shaw
CA Final
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2
23
AI commodity readings
CFA
answered on 04-Sep-26 15:33
I cant understand the headung pressure hypoothesis and theory of storage hypothesis and mainly their difference pls explain in a simple way and in a given senario how do i identify which hypothesis they are talking about
latest answer
1. The Hedging Pressure HypothesisThis hypothesis states that futures prices are driven by the imbalance between short hedgers (producers) and long hedgers (consumers). The Core Idea: Whoever wants to hedge more has to "bribe" speculators to take the other side of the trade If producers dominate the market (e.g., many farmers wanting to sell wheat futures to lock in prices), they push futures prices down below the expected future spot price.If consumers dominate (e.g., many airlines wanting to buy oil futures to lock in costs), they push futures prices up. 2. The Theory of StorageThis theory states that futures prices are driven by the physical availability of the commodity (inventory levels). The Core Idea: Having actual, physical goods in a warehouse right now provides a benefit called convenience yield. How it works:When inventory is very low (scarcity), physical goods are extremely valuable right now. This drives the current spot price sky-high, while futures prices remain lower (Backwardation).When inventory is high (abundance), holding onto the goods is expensive due to storage costs and insurance.. Therefore, futures prices will be higher than the spot price to compensate for those costs (Contango).
Dhakshana Dhakshana
CFA L2
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34
PM VAR
CFA
answered on 03-Sep-26 13:25
A portfolio might remain under its VaR limit every day but lose an amount approaching this limit each day. If market volatility during the last year is lower than in the lookback period, the portfolio could accumulate a substantial loss without technically breaching the VaR constraint pls explain i cant understand
latest answer
VaR has no memory: It resets every morning. It does not care if you lost money yesterday.VaR ignores proximity: A loss of $999,999 is treated as a "success" by the system because it didn't hit $1,000,000.Lookback lag: If current volatility drops, VaR models based on older, volatile data become blind to massive risk accumulation.
Dhakshana Dhakshana
CFA L2
★ 18K+
1
23
No. of GDR computation
AFM
answered on 03-Sep-26 13:22
Sir, ive computed the no. of GDRs in the following way, please correct if my understanding is wrong 10Mn x 102/100= $10.2 Mn $10.2 Mn/ $7.5 = 13.6 lakh GDRs [Video Time Stamp: 08:48]
latest answer
Yes correct
Varshini Rao
CA Final
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37
Compenstion for past voluntary service
Corporate & Other Laws
answered on 03-Sep-26 18:17
In the second case in which the lady returned the diamond ring wasn't it a quasi contract. It was her responsibility to return that ring so how come the other lady be legally bound to pay? [Video Time Stamp: 08:01]
latest answer
Got it sir... Thank you
Unnati Mittal
CA Foundation
★ 0
2
44
PM multi-factor model
CFA
answered on 03-Sep-26 12:33
Exhibit 1 Portfolio Information for a One-Factor Model Portfolio Expected Return Factor Sensitivity D 7.70% 1 E 8.60% 1.2 F 9.00% 1.4 According to the information provided in Exhibit 1, could an arbitrage portfolio most likely be created by some combination of portfolios D, E, and F? No Yes, and the portfolio would earn an expected return of 0.25% Yes, and the portfolio would earn an expected return of 8.60% pls expain how to solve
latest answer
No when u look at it U see that for stock e beta is average of stocks de and f
Dhakshana Dhakshana
CFA L2
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4
27
Brahmastra Batch | Risk Management Chapter | Question No 2
AFM
answered on 02-Sep-26 22:19
Dear Sir, Instead of selling the shares why didn't we hedge the share through Put option or other derivatives just like we hedged the Forex risk ? Even the question didn't ask us sell the stocks and it is also mentioned specifically ignore the hedging costs. Is there any reason for not doing it ? Let me know if I have any knowledge gaps. Thanks [Video Time Stamp: 48:12]
latest answer
Good question - What you suggested is practical but we are not taught VAR computation forscenanrios suggested by you. Secondly we are not provided any additional data - only way you can reduce risk by reducing exposure ( i.e selling of some portion of assets) We are not considering hedging costs anywhere in our solution - we are focussing only on VAR - in real life cost will also be considered.
Gobalakrishnan Manikandan
CA Final
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48