Which of the below studies would most likely be conducted to test whether a market is semi strong form efficient.
a.In the past it has been observed that stocks with higher trading volumes help outperform the market. A test to conclude whether this holds good b.In the past it has been observed that buying the stocks which has announced stock bonus and holding it till end of financial year gives abnormal return. A test to conclude whether this holds. c.A test to check whether CFO of the companies have managed to outperform the market by trading in the respective company €™s(in which they work) stocks.
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Rahul and Khan were discussing about Long lived assets and they made the following comments
Rahul: Calculating depreciation under US GAAP is bit more difficult as it requires component wise depreciation. However when it comes to writing back of impairment loss it makes prediction of EPS bit easier as it does not allow writing back of impairment loss recognized earlier.
Khan: The classification of €˜Investment property €™ category under IFRS helps analyst to separate operational assets from non-operational assets in many cases. However US GAAP does not have any such classification.
a) Only Rahul is correct b) Only Khan is correct c) Both are correct
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Rabi Ltd reported an Total Asset turn over ratio of 1.9X and Net profit margin of 8.6% for year 2011. At the end of 2012 Rabi used its entire net profit for 2011 to repay its debt and brought down the debt equity ratio to 0.6X. If the sales for 2012 remained exactly same as 2011 then Rabi €™s Total Asset turn over ratio for 2012 would be
CFA level 1 question for 26-Mar-2013Which of the below studies would most likely be conducted to test whether a market is semi strong form efficient. a.In the past it has been observed that stocks with higher trading volumes help outperform the market. A test to conclude whether this holds goodb.In the past it has been observed that buying the stocks which has announced stock bonus and holding it till end of financial year gives abnormal return. A test to conclude whether this holds.c.A test to check whether CFO of the companies have managed to outperform the market by trading in the respective company €™s(in which they work) stocks.
Ans B:
A hypothesis based on past data will be used to test weak from of market efficiency A hypothesis based on events will be used to test semi-strong form of market efficiency A hypothesis based on insider information will be used to test strong form of market efficiency.
guys i have one doubt from schweser notes... Q. which of the following is least likely considered a non operating transaction (manufacturing firm)? A. dividends received from available sale of securities. B. interest expense on subordinated debentures. C. accruing bad debt expense for goods sold on credit. & what are "subordinated debentures"?
CFA Level 1 question for 27-Mar-13Rahul and Khan were discussing about Long lived assets and they made the following commentsRahul: Calculating depreciation under US GAAP is bit more difficult as it requires component wise depreciation. However when it comes to writing back of impairment loss it makes prediction of EPS bit easier as it does not allow writing back of impairment loss recognized earlier.Khan: The classification of €˜Investment property €™ category under IFRS helps analyst to separate operational assets from non-operational assets in many cases. However US GAAP does not have any such classification.a) Only Rahul is correctb) Only Khan is correctc) Both are correct
Ans B: Component wise depreciation is required by IFRS and not US GAAP Writing back of impairment loss is not allowed under US GAAP. However IFRS allows writing back to the extent of loss recognized earlier Classification of investment property is applicable only under IFRS.
Nestle Ltd reported a net profit of Rs.9620 million for the year ending December 2011. At the start of 2011 the company had 48.2 million shares outstanding. The company issued a 1:1 bonus on 1-July-2011. The company also had 5 million ESOPs outstanding at an exercise price of Rs.7000/share (at the start of the year) throughout the year. Nestle €™s closing share price on 31-December-2011 was Rs.4500/share and average share price (adjusted for bonus) during the year was Rs.4300/share. Calculate the diluted EPS for the company.
CFA Level 1 question for 28-March-2013Rabi Ltd reported an Total Asset turn over ratio of 1.9X and Net profit margin of 8.6% for year 2011. At the end of 2012 Rabi used its entire net profit for 2011 to repay its debt and brought down the debt equity ratio to 0.6X. If the sales for 2012 remained exactly same as 2011 then Rabi €™s Total Asset turn over ratio for 2012 would bea)Same as 1.9Xb)Below 1.9Xc)Above 1.9X
Ans A:
If the company uses its entire profit to repay the debt then the size of the balance sheet will remain the same. i.e the increase in owner €™s equity will be offset by decrease in Debt. If the balance sheet remains the same as does the sales then both numerator and denominator of asset turn over ratio will remain the same. This would lead to same asset turn over ratio.
Demo Ltd reported an EPS of Rs.140 last year. The company €™s book value per share is Rs.700. The company retained Rs.60 and paid the rest as dividend. The company is expected to maintain it dividend pay out policy. If the company €™s cost of equity is 11% the intrinsic value of the share should be closest to