Forums
Net Asset Value
AFM
answered on 07-Mar-24 20:23
Whether Net Assets and Net Asset value same?
latest answer
We are trying to value equity shares - why will we include value of debt in it? In this question there is not debt at all so it does not matter but for any business valuation question whether they call it as net assets or nav, when it comes to equity valuation you exclude value of debt. Secondly in business valuation, you do not compute Net assets value with book values but consider fair / realizable / market value of all assets less market value of liabilities less contingent liabilities - in this question since market values are not known we consider book values
shamanth rm
CA Final
★ 2K+
2
279
Normal distribution
AFM
answered on 07-Mar-24 09:09
Sir,can you explain how you are relating standard deviation and mean to normal distribution or to the chart? In my opinion, you have given less concept at this point.
latest answer
PLs finish the full chapter and then we can discuss
Hanumanthu Rajesh
CA Final
★ 7K+
1
335
Normal distribution
AFM
answered on 07-Mar-24 09:14
We will not get the data of Stock market on Saturday & Sunday and holidays , ,then how could it be continuous data ? Please clarify it sir
latest answer
good question. Even if it is off for a day, or two, during the trading hours it is continuous . that is what matters. By your own logic stock markets cannot shut at 3.30 PM or open at 9.00 AM. continuous does mean it is always on. When market is on the values are not discrete but continuous when we look at tick level data
Hanumanthu Rajesh
CA Final
★ 7K+
2
407
IRRM- Illustration 13
AFM
answered on 07-Mar-24 09:18
Sir, In this problem, I am not able to understand the premium part. Why we have divided the premium payable with the PVF and 4 periods as reset periods are only 3 right
latest answer
We did that because question says so.
Suresh Avinash
CA Final
★ 3K+
1
355
Premium deduction
AFM
answered on 07-Mar-24 09:27
Do we need to deduct 3 rs premium amount twice ? Or In case a - reducing rs 2 and case b reducing rs 1 Is this correct ?
latest answer
In scenario (a), he took two positions, both call and buy positions, paying a premium of ₹3 for each. He gained ₹1 from these positions, resulting in a net loss of ₹2. We consider each position as taken at two different scenarios for analysis.
Rahul Kumar
CA Final
★ 2K+
2
429
EAC
AFM
answered on 07-Mar-24 20:25
Sir while calculating EAC what is the logic behind dividing the present value of cash outflows with PVAF?
latest answer
Pls call back... i tried reachin you
Prasoon Goel
CA Final
★ 920
5
592
Debt
AFM
answered on 07-Mar-24 09:44
When calculating Asset beta in the denominator why do we take Debt (1-t)? Debt is tax deductible?
latest answer
Yes. I realised as i started with Business valuation chapter today
shamanth rm
CA Final
★ 2K+
4
276
I'll 21
AFM
answered on 06-Mar-24 20:24
Sir when we finding NPV we considering probability factor but in worst best case we directly finding NPV without considering probability factor why sir it's like that is their any reason logic behind that
latest answer
Expected npv means considering probability Worst case nov is less than expected npv and no probability it required to be attached to it
HEMAVATHYSUBRAMANI SUBRAMANI
CA Final
★ 3K+
1
365
IRRM- Illustration 5
AFM
answered on 07-Mar-24 19:19
Sir, in this problem where we have computed that 7-12 month LIBOR is 7.805% and Bank lending rate given as 6.75% and hence we have concluded that there exists an arbitrage of lending @ 7.805 and borrowing @ 6.75%. However, further we have computed the implied rate p.a and compared to the actual annual rate thereby computed the arbitrage gain. Why have we computed 7.805% as we have not used this rate?
latest answer
Understood sir.
Suresh Avinash
CA Final
★ 3K+
5
457
Cancellation and Delivery :Cancellation and Extension
AFM
answered on 06-Mar-24 16:24
Dear sir, When the Bank is going to charge the spot rate on the day of delivery after the due date within 3 days. What is the logic for the banker to enter another contract on the due date at optionally deliver at month end spot rates? What's the benefit the customer enjoys because of this facility provided by the bank due date + 3 days. when bank delivers the dollars at spot rate on delivery date after due date. In this particular illustration the spot rates are less costly for importer compared to agreed rates is this the reason for entering at spot rates it is same even when agreed rates are less costly compared to spot rate
latest answer
Bank cannot have its exposure open . it always needs to hedge it s exposure. If rule allows a customer to comeback within 3 days of expiry ( which in itself does not look logical) then bank has a contingent contract for 3 days which it needs to hedge itself against
Vanacharla Sai Pavan Kumar
CA Final
★ 8K+
3
481