November 19, 2013
Hey everyone! This blog deals with general questions on CFA. There are questions with the answers right here!
To all potential CF Analysts – it is like a treat for you! This will aid your preparation and will also help you gauge what your level of preparation is. That in turn will enable you to judge how much more time and effort you need to put into your #CFA Prep! These answers have aided my preparation enormously and I hope it helps you too.
Here is a summary of what has been covered in this discussion:
So without further ado, let’s look at some of these questions with their answers!
“If an investor puts $5,724 per year, starting at the end of the first year, in an account earning 8% and ends up accumulating $500,000, how many years did it take the investor?
a) 87 years b) 27 yrs c) 26 yrs”
“Answer is B. 8 Put- I/Y= 8, PV=0, FV=500000, PMT= -5724, N=?”
During this discussion on CFA, students raised a few interesting questions. Answers were also given by the students. One such example is:
I am appearing for 1:1 in June, and that would be my first attempt of a CFA exam. I would really appreciate suggestions from people who have cleared or already started working for the same in terms of a study plan and time that should be allotted for different sections, given that I work for 9 hrs.
What should be ideal time allotted for preparation and mocks and revision? “
“Plan a schedule as per your previous knowledge. If you have some previous knowledge in subjects just read the curriculum once and practice as many mocks as you can.
Or if you have not any previous knowledge start learning right know and finish the curriculum twice and then start practising mocks it help you to clear it in your first attempt.
Hope it helps and all the best for exam.”
As you can see, it is a general guideline on CFA Prep.
“Difference between Revaluation model and fair value: What is the exact the difference between those two in the context of NC Assets?”
“Revaluation is a method where you need to find out the fair value of Non – current tangible assets.”
Another interesting question stated by a student, Nik, is quoted below. See if you can figure it out before scrolling to the answer!
“I am looking at Kaplan, book 4, page 318, questions #8 & 9.1’m trying to figure out why the answer does not discount the year 2 constant growth to the 2nd power. This is the question #9 from the book:
Q9) Dividend grows at 25% for two years, after which growth will fall to a constant rate of 6%. If the discount rate is 10%, and most recently paid dividend was $1 the value of the Brown’s stock using the multistage dividend discount model is:
Answer as per the book: $36.65 (because they divided the constant dividend model by 1.1, not 1.1 squared as I think it should be). What I think the answer should be: Dl: 1.25 D2: 1.56 Value: $1.2511.1 (1.56 / (.1 – .06)) / (1.1) squared = 33.54 Thanks in advance for looking into this!”
“Yes here the Answer by book is correct 36.65. Calculation is 1.25/1.1 + 1.25*1.25/(1.1)^2 + (1.25)^2 1.06/10°k-6°k/0.1N Here the answer comes 36.65”
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