Doubt-
Yuya Takagi, CFO of a Japanese company, has plans to enter into Indian economy. He needs loan into INR currency. Apoorva Varma, an Indian entrepreneur wants to set up his company in Japan and wants YEN currency. They both decide to enter into a currency swap where Apoorva gets YEN in exchange of INR. They decide to swap a notional principal of 1 million INR for a year with quarterly coupon payments. The exchange rate at the time of swap initiation is 0.6615 INR per YEN. The swap is a pay fixed INR and receive floating YEN i.e. Yuya will have to pay fixed interest rate on INR and will receive floating interest rate payments on YEN.
The interest rates in India at the initiation of swap were as follows:
R (90-day) = 6.5%
R (180-day) = 7.0%
R (270-day) =7.5%
R (360-day) =8.0%
The comparable rates in Japan were:
R (90-day) = 5.5%
R (180-day) = 5.8%
R (270-day) =6.2%
R (360-day) =6.5%
After 150-days the interest rates in India were following:
R (30-day) = 7.2%
R (120-day) = 7.9%
R (210-day) =8.5%
And the comparable rates in Japan were:
R (30-day) = 6.0%
R (120-day) = 6.6%
R (210-day) =7.1%
The currency rate was 0.6510 INR/YEN after 150 days and the 90-day rates after 90 days were 7.0% and 5.8% in India and Japan respectively. At the end of 320 days the exchange rate was 0.6815 INR/YEN and the 40-day rate in India and Japan were 8.8% and 7.6% respectively. The 90-day rates after 270 days were 8.6% and 7.4% in India and Japan respectively.
1. What is the annualized fixed rate on INR which will be paid by Yuya?
(a) 6.46%
(b) 7.64%
(c) 7.75%
2. What is the value of swap to Yuya after 150 days of the swap initiation?
(a) 8,607.90 YEN
(b) -8,607.90 YEN
(c) -24,471.6 YEN
Hi,
I appeared for level 1 in Dec and thinking of starting preparation for Level II June 2013. Can anyone let me know where can I get the notes for level II in Delhi? Also please let me know if anybody interested in sharing the cost for Arif Videos (I would buy them anyways because the guy is just so awesome and I need a lot of awesomeness to clear Level II).
P.S. - Based on a very optimistic assumption that January would bring a Good News for me 
Keep working hard coz that's ur only JOB 
... Leave everything else on almighty and he will take care of it, coz that's his only JOB !! 
... Leave everything else on almighty and he will take care of it, coz that's his only JOB !!
@sahilaggarwal8 : Can u please share regarding this Arif Videos . Is that so good. How do u know about it ?? I have heard of that recently. But never tried it. Can someone who already purchased that video explain reg it. Please
@svswift I used Arif's videos for level 1 (as they were available on Youtube for no cost) and they proved to be really useful. you can have a look at some of them on Arif Irfanullah channel at Youtube.
@svswift I used Arif's videos for level 1 (as they were available on Youtube for no cost) and they proved to be really useful. you can have a look at some of them on Arif Irfanullah channel at Youtube.
I have purchased Arifs videos for L2 for june 2013 .
It costed 250 $
Hi Guys
For level 1 , I just consulted the schweser notes, didn't even pick up the main books. Would the same approach work for L2 as well or not possible at all without the main books.
@anytomdickandhary
Hi
I gave L1 in december and have started prep for L2 and finished derivatives and first 4 readings of Equity. I plan to finish Derivatives+ Equity+ Corp Finance + FRA by january end= 60% of the syllabus.
But can you tell me how much time will portfolio take? Also how to tackle quants and FI as thy are pretty tough i guess
Hi
I gave L1 in december and have started prep for L2 and finished derivatives and first 4 readings of Equity. I plan to finish Derivatives+ Equity+ Corp Finance + FRA by january end= 60% of the syllabus.
But can you tell me how much time will portfolio take? Also how to tackle quants and FI as thy are pretty tough i guess
@iwantgovtjob said:@anytomdickandharyHiI gave L1 in december and have started prep for L2 and finished derivatives and first 4 readings of Equity. I plan to finish Derivatives+ Equity+ Corp Finance + FRA by january end= 60% of the syllabus. But can you tell me how much time will portfolio take? Also how to tackle quants and FI as thy are pretty tough i guess
portfolio does not take a lots of time....and it is easy to handle.
Quant can be fairly painful if you do not have a flair for statistics, since you have started so early I think you will have lots of time to finish it, going through quant topics multiple times at regular intervals will help you crystalize the concepts.
Fixed income can be mastered only with practice, especially later chapters.
since you have started so early I dont think you would have any real issues. for me L2 was 40 day game so I had to seek a lots of balancing.
ATDH.
@anytomdickandhary
40 days? its impossible yaar.
I am worried that i have started late since june l1 passouts must have covered a lot by now
40 days? its impossible yaar.
I am worried that i have started late since june l1 passouts must have covered a lot by now
People who wanna share Arif Irfanullah videos can pm me
@iwantgovtjob said:@anytomdickandhary 40 days? its impossible yaar.I am worried that i have started late since june l1 passouts must have covered a lot by now
40 days might look impossible but in reality its not.
Out of these 40 days I was on leave for last 15 days before exam.
out of 25 days (approximately 4 weeks) I had 2*4 = 8 days as full weekends. So that leaves me with a break up of (15+8) = 23 days of full leave and around 17 days of working.
out of these 23 days I could pull on an average of 11 hrs a day (this 11 hrs a day is actual time spent on study table) 23x11 ~ 250 hrs
Now that might sound a bit difficult but 11 hrs is not really that difficult, if you divide it in 3 periods of 4 hrs each.
(8 to 12)-->study
(12-1)--> (lunch)
( 1-5) --> study
(5-6:30)----> break + evening walks
(6:30 - 8:30)--> study
(8:30-10:00) dinner time+break
(10:00-11:00)-->revise the days study
(11:30--7:00) --> sleep (good 7.5 hr you see)
in rest 17 days when I was working, managing 3-4 hrs is not that difficult so that gets you another 60 hrs. So total of 250+60 = 310 hrs
In the last week I pulled almost 14- 15 hrs per day hence getting some additional 20-25 hrs (required for revision)
Also, I have some finance back ground so I required almost no prep for derivatives and more than 50% of fixed income syllabus was known to me due to nature of my work.
So that leaves me with 7.5 topics to prepare for ( as derivs , ethics and 50% fixed income already known)
topics like alternate investments and economics hardly require any time to finish as they are very simple. Hence there were 5.5 topics that were problematic for me. I decided that Quant has little weight in CFA hence I am not going to waste time trying to master it (you can read my detailed post regarding dissection on CFA syllabus).
That leaves me with 4.5 topics. (Equity + Corp Fin + FRA + Portfolio + 0.5 fixed income)
So if I set aside 50 hrs of my 300 hrs for quick run of derivs+0.5fixed income + eco and AI. Then I am left with good 250 hrs for 4.5 topics.
And I am sure you would agree that 250 hrs is more than enough for these 4.5 topics. as Corp Fin and Portfolio are relatively small and have fewer and simple topics. Equity and FRA are the biggest sections requiring a lots of preparation.
I did only 1 mock exam of 3 hrs before exam to get an idea of caselets.
I hope you are convinced now. that 40 days is sufficient for clearing CFA2.
ATDH.
@anytomdickandhary
MAN you are too good. So that means i ca finish the syllabus by the time exam comes.
I was worried that i am way behind people who have cleared L1 in june 2012.
MAN you are too good. So that means i ca finish the syllabus by the time exam comes.
I was worried that i am way behind people who have cleared L1 in june 2012.
@guptasameer said:Hi GuysFor level 1 , I just consulted the schweser notes, didn't even pick up the main books. Would the same approach work for L2 as well or not possible at all without the main books.
yes it should work very fine for level2.
However, it would be good to have a quick glance through CFA books after you have finished reading from schweser, so as to ensure that you have not missed anything. For example in Corp fin some areas which require theoretical understanding is not very well covered in Schweser, (example dividend policy) also schweser is too condensed for some topics in Portfolio management chapters. For example arbitrage pricing theorem is covered in just a page or two in Schweser where as reading the actual CFA material gets your concepts clearer.
In FRA one might want to see the chapter related to pension if it does not get clear from Schweser notes. However,I feel for FRA schweser notes are more than sufficient. Also, Equity is very well covered in Schweser notes.
Fixed income later chapters should be read from schweser notes at least twice before you run for CFA books. If you directly jump to CFA books then you would end up spending too much time and still the concepts would not get cleared.
ATDH.
@iwantgovtjob said:@anytomdickandharyMAN you are too good. So that means i ca finish the syllabus by the time exam comes.I was worried that i am way behind people who have cleared L1 in june 2012.
yes you have loads and loads of time..... so dont worry.
ATDH.