When the option is lapsed, u need to need to long the equivalent value of shares. Be it put or call option, when it is lapsed, it looses it's validity. U need to sell the underlying shares. Therefore short position of 100
@@Hackmann8988 If one has purchased an option, if option lapses and there is no gain, nothing else needs to be done. Initial premia is lost. If one has sold an option and option lapses as buyer has not executed because the buyer is not making any profit, then Nothing needs to be done by the seller. Premium received in income to the seller If one has sold an option and buyer is in profit, then seller has to pay profit to the buyer. So, the net loss for seller is amount paid to buyer minus premia received
They gave Beta in context of its equity capital - It should be ideally assumed as Ke and not Ka. Usually whenever they give asset beta they are very specific about it
Sir.. in 1:49:30 - on one side you have taken .0998 and multiplied by 58/365 and the other side you have multiplied .105 directly and multiplied by 59/365.. just wanted to check if it should be consistent? If we use .0998 and then multiply with 59/365, we will have to interpolate and find value I guess. Pls confirm if my understanding is correct/incorrect.
That was intentional - I did it to show you how ICAI solved it in both ways but i feel using 59 is correct - Yes you could interpolate but answer would not be significantly different as we are rounding off after 4 decimals w.r.t e power rt value. Also - pls have a look at ICAI illustration 11 page 73 of ICAI SM Derivatives chapter - they solved the problem using 58 days resource.cdn.icai.org/74836bos60509-cp9.pdf
Marks Breakdown [Descriptive] : * Portfolio Mgt = 10 Marks * Derivative = 14 Marks * Mutual Fund = 6 Marks * Capital Budgeting = 8 Marks * Interest Rate Risk = 10 Marks * Forex = 12 Marks * Corporate Valuation = 4 Marks * International FM = 6 Marks * Security Valuation = 4 Marks
Because ICAI also gave value of e power 0.01668 pls have a look at ICAI illustration 11 page 73 of ICAI SM Derivatives chapter - they solved the problem using both methods resource.cdn.icai.org/74836bos60509-cp9.pdf
@1FINCAFinal yes sir... I am wrong as I know.. because they have mentioned everything there in the month. And one more q2a...you were connecting with ICAI module question..but there Annualized return is different and here annualized return is different.
@@sumitprajapati2278 Technically SD of returns is computed in % for Growth fund it would be 10% i.e 0.1 Variance would be (0.1)^2 i.e 0.01. However when you Do not use % for SD and mention it as just 10 then variance would be 100. However Variance of 100 does not mean it is 100% but 100 percentage square. refer link below You can google " what is unit of measurement of Variance & standard deviation" and check the answer for yourselves. ICAI will give marks either ways
Sir in Q 3(b) (nostro ques) I correctly recognised amounts given in ques both in nostro and gbp account but didnt done further how much marks can i expect?
In question 3a FRA question, I have put correct formula and correct value in it according to profit or loss, but in doing calculation on calculator mistakenly difference arise in points like my answer for 1st part is 8.24% instead of 8.59%. How much i will score out of 6... Just calculation error, all values are put according conceptually. Please tell sir.
@@knowledgebooster7905 you may get some marks and not full Reason is they specifically gave e power values and you were supposed to use them Number of rounded contracts should ideally be the same so some parts of question you will get marks
Answer for MCQ 2A is 156.69it is correct. For Descriptive Q 2A - "Mr.X invested 1 Lac in MF" also , the solution is right? What according to you is incorrect in the solution?
Sir when we get value of 20.5 on 31/03/23 afterwards dividend declared and on some date units redeemed then how no of units can change which was 10487.8 will be same on redeemed day
@ assumption in these questions is dividend is declared first and redemption is done next Otherwise quest has no meaning There are similar such question in ICAI sm / past papers and we covered them in class too
Sir div is declared on 1/7 how can you reinvest on nav based on 31/3 This is making no sense And also hpr includes div also which u have not considered while calculating clo value If we consider div also in calculating closing nav cl value would be 205000 not 215000 bcoz in ques hpr is given which include div and cap gain
Pls recheck the question paper - Dividend is declared on year end dates 31/3/23 & 31/3/24 HPR includes dividend - I computed Investment value before payment of dividend, Then there is dividend outflow and the dividend is reinvested at same NAV. So if you compute closing units x closing NAV and subtract the opening value of investment HPR of 115% works out
Sir,First thanku for such detail solution Sir, in que 4c i have taken 360 days instead of 365 and i have also written assumption in copy, sir i this wrong?
Sir vo ebit vale question me mene Rm - rf ki jagah usko rm man liya galti se pr procedure pura sahi kara h Pr sir kya iske Karan mera pura question galat hoga kya
Pdf of complete solutions: 1fin.in/AFMPaperSolution
Part I - MCQs
1:45 - Case scenario I
13:40 - Case scenario - ll
23:00 - Case scenario lll
26:40 - Case scenario lV
Part II - Descriptive Q
36:00 - 1[ A]
41.26 - 1 [B]
52:14 - 2 [A]
1:03:00 - 2 [B]
1:14:00 - 3[A]
1:26:56 - 3[B]
1:39:42 - 4[A]
1:55:25 - 4[B]
2:04:00 - 4[C]
2:12:24 - 5 [A]
2:35:22 - 5[B]
2:44:06 - 5[C]
2:58:44 - 6[A]
3:08:55 - 6 [B]
When the option is lapsed, u need to need to long the equivalent value of shares.
Be it put or call option, when it is lapsed, it looses it's validity. U need to sell the underlying shares. Therefore short position of 100
@@Hackmann8988 Yes. Afm book pg no 9.38- abandonment exit of options .. please check.
The answer should be Long position 100
@@Hackmann8988 If one has purchased an option, if option lapses and there is no gain, nothing else needs to be done. Initial premia is lost.
If one has sold an option and option lapses as buyer has not executed because the buyer is not making any profit, then Nothing needs to be done by the seller. Premium received in income to the seller
If one has sold an option and buyer is in profit, then seller has to pay profit to the buyer. So, the net loss for seller is amount paid to buyer minus premia received
@Tvkharish-p5k Pls share the link.
@@Hackmann8988ya also marked short position of 100
1:57:11
In question 4{d) asset beta is given not equity beta
So first have to calculate equity beta then we will get ke.
They gave Beta in context of its equity capital - It should be ideally assumed as Ke and not Ka. Usually whenever they give asset beta they are very specific about it
What if we assumed it as Asset beta and derived Equity beta will it be wrong
@@mayurpoddar8328ICAI should and may award marks because they were vague is framing the question
Thanks Sir
@ you will still get marks but how much I am not sure
ICAI could award full marks too because their question was not clear enough
Sir.. in 1:49:30 - on one side you have taken .0998 and multiplied by 58/365 and the other side you have multiplied .105 directly and multiplied by 59/365.. just wanted to check if it should be consistent? If we use .0998 and then multiply with 59/365, we will have to interpolate and find value I guess. Pls confirm if my understanding is correct/incorrect.
That was intentional - I did it to show you how ICAI solved it in both ways but i feel using 59 is correct - Yes you could interpolate but answer would not be significantly different as we are rounding off after 4 decimals w.r.t e power rt value. Also - pls have a look at ICAI illustration 11 page 73 of ICAI SM Derivatives chapter - they solved the problem using 58 days
resource.cdn.icai.org/74836bos60509-cp9.pdf
@@1FINCAFinal got it sir. Thanks for clarifying.
Marks Breakdown [Descriptive] :
* Portfolio Mgt = 10 Marks
* Derivative = 14 Marks
* Mutual Fund = 6 Marks
* Capital Budgeting = 8 Marks
* Interest Rate Risk = 10 Marks
* Forex = 12 Marks
* Corporate Valuation = 4 Marks
* International FM = 6 Marks
* Security Valuation = 4 Marks
1:13:15 if solve without taking discount rate how much marks my ans of investment is 420 lac
Not sure depends on evaluator & icai guidelines for that question
Sir ur that future alternate answer is wrong because they have specifically given ln (1.105)
So how can u use other alternate
Because ICAI also gave value of e power 0.01668
pls have a look at ICAI illustration 11 page 73 of ICAI SM Derivatives chapter - they solved the problem using both methods
resource.cdn.icai.org/74836bos60509-cp9.pdf
@1:22.. question no 3.. i took 90 days and 365 days...and did .got 9.53%
But they did not mention 365 days. That should be fine too ideally
@1FINCAFinal yes sir... I am wrong as I know.. because they have mentioned everything there in the month.
And one more q2a...you were connecting with ICAI module question..but there Annualized return is different and here annualized return is different.
@ here they modified it as holding period return instead of annualised return.
In q 1 b I did correct calculation of probability how many marks will be awarded?
Not sure - Depends on evaluator
Dear sir
When standard deviation of growth fund is 10 then variance must be 100(%)^2
Why you are showing 1 as variance
Question no. 6(a)
@@sumitprajapati2278 Technically SD of returns is computed in % for Growth fund it would be 10% i.e 0.1 Variance would be (0.1)^2 i.e 0.01.
However when you Do not use % for SD and mention it as just 10 then variance would be 100. However Variance of 100 does not mean it is 100% but 100 percentage square. refer link below
You can google " what is unit of measurement of Variance & standard deviation" and check the answer for yourselves. ICAI will give marks either ways
Thank you for making this video sir, This is really helpful.
You are most welcome
Sir if in 5a we find 5 Forward Rate using how many marks will be awarded
Tough to say. Depends on Evaluator and ICAI Exam Key
Sir in the question 6 I got answer as 100,56.25,56 ,56.25 i didn't put % sign will I get any marks?
Actually ICAI in all its material states variance as 100,56.25 etc
They incorrectly ignore %
Yuu will get full marks if you write 100.56.25 etc
Sir in Q 3(b) (nostro ques)
I correctly recognised amounts given in ques both in nostro and gbp account but didnt done further
how much marks can i expect?
4 bro
In question 3a FRA question,
I have put correct formula and correct value in it according to profit or loss, but in doing calculation on calculator mistakenly difference arise in points like my answer for 1st part is 8.24% instead of 8.59%.
How much i will score out of 6...
Just calculation error, all values are put according conceptually.
Please tell sir.
@@anshulgoel6731 probably 1-2 but not sure . Depends on evaluator
@1FINCAFinal 1-2 marks awarded or deducted sir??
@@anshulgoel6731if u r writing group 2 forget abt this
All depends on evaluation guidelines
@@1FINCAFinal thanks sir
sir i have not done rounding of in ques 4 c will it affects my marks ?
No it will not affect marks
Sir,how many marks ,will they give,if we attempt the advanced capital budgeting question sum,which is wrongly framed?
Ideally full marks in my opinion
Sir i have used 10.5*59/365 is this method correct
@@knowledgebooster7905 you may get some marks and not full
Reason is they specifically gave e power values and you were supposed to use them
Number of rounded contracts should ideally be the same so some parts of question you will get marks
I think 3 marks will be awarded in total. Out of 8. I also did same mistake.
Q 2A is incorrect
Answer for MCQ 2A is 156.69it is correct.
For Descriptive Q 2A - "Mr.X invested 1 Lac in MF" also , the solution is right?
What according to you is incorrect in the solution?
Sir when we get value of 20.5 on 31/03/23 afterwards dividend declared and on some date units redeemed then how no of units can change which was 10487.8 will be same on redeemed day
@ assumption in these questions is dividend is declared first and redemption is done next
Otherwise quest has no meaning
There are similar such question in ICAI sm / past papers and we covered them in class too
@@princyjain1057same logic I applied,that units should not be changed as it is redeemed without reinvestment, although nav on 31/03/24 was ₹25.95
Sir div is declared on 1/7 how can you reinvest on nav based on 31/3
This is making no sense
And also hpr includes div also which u have not considered while calculating clo value
If we consider div also in calculating closing nav cl value would be 205000 not 215000 bcoz in ques hpr is given which include div and cap gain
Pls recheck the question paper - Dividend is declared on year end dates 31/3/23 & 31/3/24
HPR includes dividend - I computed Investment value before payment of dividend, Then there is dividend outflow and the dividend is reinvested at same NAV. So if you compute closing units x closing NAV and subtract the opening value of investment HPR of 115% works out
@@1FINCAFinal okay sir , can we expect grace marks in que 2b ?
@@jj24899 If you attempted yes
Sir,First thanku for such detail solution
Sir, in que 4c i have taken 360 days instead of 365 and i have also written assumption in copy, sir i this wrong?
@@Singhal9460 depends on evaluator. Assume 1 or 2 marks may be deducted,
Sir vo ebit vale question me mene
Rm - rf ki jagah usko rm man liya galti se pr procedure pura sahi kara h
Pr sir kya iske Karan mera pura question galat hoga kya
You may get very few marks in that question. Lets wait for final results and certified copies
Sir in Q6(a) in Rx - Rf I’ve solved it as 0.075-0.09 instead of 7.5-9 😢
Will I get any marks?
@@MisfitGamer-vk3of unlikely sorry
sir in ques 4 a i have used 1.01598 is it correct as you taken 1.01682 ?
It is correct too. I solved using two methods both are used by ICAI in their SM and you will get marks for either method
Sir I've solved sixth question by calculating systematic risk/total risk, will it be wrong?
@@mohitkarara637 not sure if that is the right way.
Thank you sir 🙏
You are welcome.
1:10:00
I did mistake in 2 questions