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Immunization Query
AFM
answered on 04-Jan-24 13:03
Sir, I have experimented with the values considering the values as Y as 11%, C as 10%, and Maturity = 100 Bonds, P =10 years. Assumed that Yield change happened immediately after Investment and assumed that market price is same as that of the Instric value of coupon and maturity value discounted at yield. I have got a deviation of 0.45 paise ( did in Excel). I have understood the formula and concept of Immunity but I have not understood the logic behind why and how if we keep the invested money till Macaulay duration and Reinvest the coupon payments till Macaulay duration we can protect ourselves against the yield and reinvestment risk. Why it is only the Macaulay Period. Video Details Course: Advanced Financial Management - AFM Module: Security Valuation - Bonds Section: 24. Illustration # 2 Immunization
latest answer
Think of a zero coupon bond. It is fully immunized as the Entire cash flow comes only at the end of the tenure of the bond as there are no intermediate cash flows of principal or interest. Now think of the mathematical formula for the pricing of a coupon bond and also the formula for Mac Duration The purpose of immunization is achieved i.e change in bond price due to a change in interest rates is offset by interest cash flows and their reinvestment when duration is equal to tenure - now look at this from the mathematical formulae perspective and you will get it I did not elaborate in class because it is not required for the CA syllabus and was worried that students would find it too technical :) I shall try and make a video on this in coming days and share it on YT channel
Vanacharla Sai Pavan Kumar
CA Final
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Illustration 35 Equity Valuation SFM
AFM
answered on 02-Jan-24 11:32
Dear sir, In this particular Illustration, an assumption is taken that the FCFE has grown already by 10% in 2022 Instead of taking the next 3 years i.e. 2023 2024, and 2025. Video Details Course: Advanced Financial Management - AFM Module: Security Valuation - Equities Section: Illustration # 35 - FCFE
latest answer
You can take that assumption as well.
Vanacharla Sai Pavan Kumar
CA Final
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1
354
Calculation of Return
AFM
answered on 01-Jan-24 21:47
While we calculate return, the logic behind deducting Opening NAV from Closing NAV is clear but why do we add gains and deduct expenses while calculating return %. Because this addition/subtraction would have been considered while calculating Closing NAV. So, isn't it double calculation. Video Details Course: Advanced Financial Management - AFM Module: Mutual Funds - SFM Section: Illustration - 3
latest answer
Understood Sir ! Thank You
Hrishikesh Pradhan
Qualified CA
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3
442
ETF
AFM
answered on 01-Jan-24 14:37
Hi sir, I have a doubt regarding how ETF works. When we buy a Equity share, we pay to a existing Eq sh holder & money doesn't go to the company. The price of a share is determined buy the demand and supply ,i.e how much the buyer is willing to pay and hold the respective company's share. When we buy a unit of a MF, the amount goes to AMC. The value/price of NAV is determined by the closing value of the portfolio after certain adjustments(i.e after the expenses). It is not exchange traded(open ended scheme) So, my doubt is , 1.when we buy ETF to whom does the money goes? To a existing ETF holder or to the AMC ? How does the price of an ETF is determined? 2. When we buy a share we become a Equity shareholder of company & when we buy a Unit of MF we become a unit holder of a AMC. When we buy a ETF ? 3. ETF is a derivative ? or its really backup by something? 4. or the close ended MF schemes which get listed is called as ETF? Video Details Course: Advanced Financial Management - AFM Module: Mutual Funds - SFM Section: Equity Diversified Schemes
latest answer
Yes
Abinesh Balasubramaneam
CA Final
★ 270
3
486
M&A- post merger market price
AFM
answered on 31-Dec-23 19:39
Sir , same like how we computed post merger eps ie. Total earnings/revised shares ( 21.6/6.9) Can we do the same to get post merger Market price ( 30*600000 +14*180000 ) /6.9 ? rather than doing post merger Eps * Pe ratio. If I do so , the Mp is different from what it is calculated in video. we can't calculate like way I did Is it because of It's asked in question PE ratio of accquirer doesn't change ? ( so indirectly we will be applying pe ratio of accquirer to both cos ) , but in the way I did it ignores that ? Please explain this and correct me if am wrong. Video Details Course: Advanced Financial Management - AFM Module: Mergers, Acquisitions and Corporate Restructuring Section: Illustration # 10 - A Ltd & T Ltd
latest answer
Thank you sir.
Enuguru Sai Nithin
CA Final
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821
Illustrations
AFM
answered on 29-Dec-23 13:40
STUDY MATERIAL questions are given in this material (indigo learn) are covered all of problems of amendment material of AFM 2024 MAY ICAI STUDY MATERIAL Video Details Course: Advanced Financial Management - AFM Module: Foreign Exchange Exposure and Risk Management Section: Illustration # 8 - Cover
latest answer
Yes. 99% of them - 1or 2 Questions would have been left out (on an overall basis) if they are of repetitive nature or a very similar question has already been solved
venkat pokala
CA Inter
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1
367
illustration - 11
AFM
answered on 28-Dec-23 01:04
sir , can you explain why depreciation and capex is not considered in terminal year , i did not understood that part. Video Details Course: Advanced Financial Management - AFM Module: Business Valuation Section: Illustration # 11
latest answer
Thank you sir
Enuguru Sai Nithin
CA Final
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450
Error occurred
AFM
answered on 26-Dec-23 20:50
It shows error code 2079 while watching the class
latest answer
support@indigolearn.com If videos are not playing try the steps below 1. Close all the apps 2.Android: Settings -> Applications -> 1FIN-> Storage -> Click on 'Clear Storage' and 'Clear Cache' 3. Restart device 4. Open 1FIN app and play the video If this also does not work please try the below troubleshooting steps, it usually works. Also, note that the downloaded videos if any will get deleted in the process. 1. Uninstall the app 2. Restart phone (Important step, clears a lot of issues) 3. Install app Also, check if there are any OS updates available. If this does not work, then please do the following 3 steps and share screenshots and videos with us by a reply email to the ID - support@indigolearn.com 1. visit speedtest.in and take a screenshot of your internet speed and share it with us 2. visit whatsmyip.com and take a screenshot of your IP and send it to us 3. take another phone and make a video recording (<20 MB) of the error you are facing on your phone/laptop and share the video recording with us Once you share the above 3 we shall connect you with our Tech Team Thanks Team IL
Saravanan Murugan
CA Final
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lectures
AFM
answered on 26-Dec-23 20:11
how can i view next lectures of afm Video Details Course: Advanced Financial Management - AFM Module: Introduction to SFM / AFM Section: Introduction to SFM
latest answer
App or website ??
Hajeera Begum
CA Final
★ 0
2
369
Forward interest rate
AFM
answered on 26-Dec-23 08:00
Illustration 15 interest rate futures Electraspace is consumer Electronics Wholesaler. In this problem if actual interest rate turnout to be 4.5% and 6.5% given in the question both are deposit rate. This we have to compare with borrowing rate. Am I correct? Video Details Course: Advanced Financial Management - AFM Module: Interest Rate Risk Management Section: Illustration # 15 - FRA/Futures
latest answer
Not 4.5 & 6.5 are also borrowing rates. pls go through solution carefully
swaminathan sundaram
CA Final
★ 110
1
384