
Fergus
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What is the intuition behind an increase in interest rate leads to a decrease in duration?
As rates rise the bond price falls at a decreasing rate because of convexity. The slope of the curve for the bond price vs Yield represents the duration (sensitivity of bond price to changes in rat...
When will the remaining Level III Readings unlock?
Every year, CFA Institute updates the curriculum to ensure study materials and exams reflect the most up-to-date knowledge and skills required to be successful as an investment professional. As the...
Where do I find the VILT Classroom schedule on the portal?
You can access VILT Classroom sessions details from the Schedule page. When you click on the link you will be taken to the Webinar page that includes all VILT Classroom session details. When you ...
Joining a Zoom training session
Web Login To login using a web browser, click on the link that has been sent to you or you can copy and paste the URL into a web browser of your choice. You will be prompted to either open t...
Can you please explain why key rate duration may be negative?
Fixed Income - Key Rate Duration There is no quick explanation! This is a very technical, academic aspect. It all depends on the notion of the par bond (on the Cognition slides, this is a 5% coup...
How do you calculate Fixed Capital Investment using gross assets instead of net book value?
Equity Valuation - FC Inv't using gross assets value FC Inv't is the change in gross assets where gross assets is the NBV + Deprec. Let's do a simple example: Opening NBV 100, deprec for the year...
Do we need to add back preference dividends when calculating FCFF?
FCFF needs to NOT include pref div. Whether you add them back or not depends upon whether they have been deducted or not in the first place. e.g. if we are starting with "Earnings available to o...
How we calculate fixed capital investment when there is an asset disposal?
Equity Value Let's try an example. Firstly we'll ignore any disposals. You can either get FC Inv by reconciling opening to closing gross PPE (NBV + accumulated deprec) or use net PPE but then dedu...
How do we know when to use the highest Sharpe ratio portfolio?
Corner Portfolios If the highest SR portfolio has a return that is equal or higher than the required return then we will always use this portfolio. If the required return is lower, then we will inv...
Can you explain the difference between US GAAP and IFRS in the calculation of the interest cost of a defined benefit pension plan?
For US GAAP interest cost (which we see in the reconciliation of PBO) is the same as the interest cost we see in I/S. Both use opening PBO x r. However for IFRS these two are NOT the same. The rec...