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I cant speak for SP6, but SA7 has relatively little core reading, but there is often only a modest part of the exam that is based on the core...

Hi, You are not alone. This does pop up a lot, and on the forum there have been a couple of posts. this explanation may make it a bit clearer:...

It has been decommissioned. Sorry.

Yes, sorry for the delay. The app was apparently decommission ages ago, due to a change in the security policy at BPP. The app wasnt compliant....

I agree that it does seem to be dead. I will research and find out why and post when I resolve it.

I think the issue with this one is that the MS suggests an assumption that salaries will grow 1% over inflation, but the result is consistent with...

I think the examiners had the initial contribution growing at 3% pa with salary growth each year, then rolled each year's contribution up to age...

Hi You are maybe thinking of a future as being something that it is not. For example you say "the clearing house is holding the bond .." The...

No - there used to be a big section in SA5 that contained loads of stuff on the EU directives, and it used to be examined in quite a UK-specific...

It varies, but usually the examination team will have written 200 marks of questions by end December 2023, which will be shuffled into 2 x 100...

Yes - thats exactly it.

Tricky one - there is usually a clue in the question as to whether they want (say) a 3 year return, or the return in each of the 3 years. But if...

I would struggle to answer this one. I dont know what structured products that CR writers would have had in their mind at the time of writing....

If people are avoiding tax by opting for investments that give a capital gain, then taxing people on total return would remove the opportunity to...

Buying back bonds is quite unusual. It has happened but it is unusual. Its more about issuing bonds in the right areas of the yield curve so...

Being a good benchmark isnt an either/or, and there are many things that make an index good. Being market cap weighted is a very important one....

I think you may be right. If the dollar appreciated to say 1.15, then the profit would be 1.1614/1.15 = 1.0099 per euro, which is a bigger euro...

There are days when a government will bring in more in tax than it spends. This will drain the banking sector of funds and potentially lead to a...

I might dispute your analysis. I have had a brief look at the revision notes and there appear to have been three in the last few years alone....

It is easier to understand this with a few numbers for demonstration. If I design a model of a company, with all the risks etc, and the model...

We also found that the things you have noted above are all unclear from the question. Our ASET begins with a discussion of exactly this idea....

For exams set and marked by the profession, we (ActEd) would not be able to say what did or did not score marks, other than what is on the marking...

I would disagree that the treynor can only be used for managers with the same level of risk. Treynor produces a "return per risk" number which...

I would not be able to do that as its quite complex, and there are many stage before the final result. If you have the revision booklets the...

Th ActEd ASET and revision booklets seem to have the cash sector selection at -0.47% for year 2, using both the first and the second method that...

Rolling the hedge forward involves continuously closing out one position and replacing it with a longer derivative. Each time you deal in either...

Both are correct. If you use proportions, you end up with a percentage volatility. You have to then apply this percentage to the fund value to...

I dont think I fully understand your query here. The volatility in the formula is an annual volatility. The assumption is that the rate R(k) is...

Q1 Investment risk is reduced in an LDI approach because the fund avoids things that have volatile investment values, such as equities and...

Yes - its a funny word to use: "transparent". But I think it just means efficient. So illiquid bonds would be less transparent.

Bond rates would be the most obvious rates to use, but you could use swap rates I suppose. However I dont see any advantage in using anything...

Q2 I suspect the examiner just wanted to say that we should avoid making too many short term perormance measurements calcs, as it increases costs...

Not sure if there is a proof anywhere. If X(i) are independent variables, such as the return of an asset over a period of time such as a day,...

Standard deviation of a time series increases with the root of time. So if a variable has a 5% standard deviation over 30 days, it will have a 5%...

Immunisation is a bit out of date. In 2015 there would have been more in the core reading on it - and one of the criteria is that the PV of assets...

Indeed - if the examiner doesnt give you a mean return, just assume something - most likely zero. This is particularly relevant if the period is...

Good point. I have scrolled up in the ActEd ASET and we give two solutions. One the way the examiner did it which was using on the weighting at...

Unfortunately no. You have to work out what the weightings are in the actual fund and in the benchmark at the start of each year. So for example...

Yes, when a company increases debt rather than issue equity, any profits above the debt interest will fall to the existing equity shareholders...

Ahh. OK I see what you mean. The "M" stands for market risk, which is the risk caused by volatility of market prices. This risk can be caused...

X5.1(ii) has the instruction word "discuss" which often involves more detail than an outline or list question. So this would be reasonably...

It is impossible for me to comment on the likelihood of specific questions in the forthcoming exam. A question on financial planning is a...

Answering in a word table rather than bullets is fine. For details on instructions words, search for the IFoA list of the instructions words that...

Hi What you say above is generally correct. It does give some explanation about the forms of government policy in the solution, and the...

Yes, the term is a common one in the financial markets but would not have been familiar to many ST5 students of the time. It was never in the ST5...

SP5 is quite integrated into SA7, and many SA7 questions look like glorified SP5 questions. So it is recommended that you have either studied and...

Hi the revision books certainly have had any out-of-date questions removed, and as you say, they go back a full 10 years. However you may be...

Yes - but not that many. Our ASET product would remove those questions (if you have it), but it would be difficult to list any redundant...

The key to the short term planning process is the estimation or forecasting of cash. Any accounts or management accounts that are used, would...

Hi I have tried to add a few comments below. For questions about that alternative ideas would have scored marks, you would need to refer to the...

Probably a good guess, although searching for the topical question can be a needle in a haystack. Other possibilities are ESG, climate change...

It says that you should use Excel as a calculator. Your key answer should be in Word. But if you paste numbers in a spreadsheet into word, those...

I am sure these would have scored full marks - the examiner was not wanting the result to the nth decimal place. My spreadsheet has conts at...

It was a really tricky one to get your head round I would say. I think the examiners were thinking that after making the loan to the social...

Hmm. Good point. The excel spreadsheet that has been uploaded has only one version. the one I have (which I cannot attach) has a couple of tabs...

Hi, I have the spreadsheet but it is not ActEd property so I cant just send it or post it. If you email the profession they should provide it.

Hi, I agree that it is a slightly unusual question - as you can see it is core reading rather that ActEd text. It doesnt really look to me like...

Very good point. I have the spreadsheet here but I am not sure I can post it as it is property of the IFoA. If you email them they will probably...

I cant answer the part about whether employers are happy for students to sit SA7 if its not their main area of employment - I suspect that varies...

Please bear in mind that details of the exam content should not be added to the forum for a period after the exam has finished (3 working days)

The material in these parts was just out of the blue for everyone. There has not been core reading on the material in SA6 or SA7 in the past....

Yes - this was an odd question, and I think I didnt include it because it was so odd. I felt it would be unlikely to ever see something similar....

Yes - I agree with you. This did not used to be the case. In SA6 and SA5 there were loads of halves and a few one marks. But in recent SA7...

Hi, The papers for April and September are normally written around the end of the previous year, possibly drifting into Jan 2022 (for this year's...

Hi As you say, there are no ActEd ASET or revision book products. There are simply not enough students do SA7 to warrant these products. The...

The profession state that the papers are flexibly marked, even though it doesnt say it specifically on the Ex Report. But I hear what you say,...

It is sometimes worth communicating these frustrations to the IFoA who will pass it to the SA7 examinations team. Without hearing these opinions,...

Hi, This is a tricky one for me as I have never worked on the liability side or indeed on Solvency II. It sounds like you know more than you...

This was an unusual revaluation question - the first of its kind I think. You are right that when a property is revalued UP the profit does not...

I think the study hours is mentioned in the following IFoA doc:...

Hmmm. Good point. I can answer your point below the numbered questions first: no, there have never been any SA6 or SA7 questions that ask for...

A counterparty to a swap would usually want to cover their risks, which often means buying the physical asset that they have agreed to pay the...

I would separate government stimulus from QE. the first is when a government overspends, and it boost the economy. If a government taxes less...

Hi, This would be a big topic. Too big to add to a thread I think, as I would be writing for days. Stimulus packages have a big impact on...

Hi, We at ActEd couldnt comment on hypothetical situations here as we are not making the rules. What I mentioned above was that it is unlikely an...

The number calculated in part (iv) is just an expectation based on the asset allocation decision alone. It is not useful to calculate a...

There is advice on how to use excel on the professions website. It should not be more difficult to produce a table of results in word than it was...

Lets hope that when / if it comes up, the examiners are kind enough to use an annual paying bond :) PS, it has never been tested in ST5 or SP5...

Sorry: P = (C/2)*( (1+(i/2)^-1 + (1+(i/2)^-2) + ... )

Hi, The key is that, if a bond had semi-annual coupons, we would refer to its yield using a semi-annually compounding rate. So if such a bond has...

In theory - yes. SP5 gives you the formula for the "no arbitrage" fair price for a forward on an asset paying interest. F = S * exp(r-q)T So...

Your logic has a flaw. The spot transaction and the forward transaction basically get you the same thing in the end, therefore they are just...

Hi, I would say you were bang on in your description. If an institution buys overseas assets, there is a natural inflation hedge. As you say,...

Hi The rationale is that if an investor has signed up to a series of LIBOR payments over the next (say) 5 years, they can arrange a series of FRAs...

The examiners result is obtained by taking the index prior to the change of player (106), making a change to reflect the substitution (106 -4 +6 =...

Hi, Yes, I would agree. Its a funny sentence that one. Hedging can hedge all sorts of risks, including market risk. If the exam asks for a...

Hi, Whew - that goes back a bit! Yes the examiner mentioned that the yield ratio was high, which I think means that the yield of the equity...

This very much depends on your SP5 knowledge. If you covered the material recently, and attribution, MWRR, TWRR, risk adjusted returns, VaR...

Hi I probably can't help much here unfortunately. I was an active manager, but we didn't use multifactor models to helps us. Nor did we use the...

It is usually referring to the government yield curve. Otherwise the examiner will call it the AA corporate bond yield curve for example.

Hi, I must admit that I also got a variety of different answers for this one (most of which were a bit higher than the examiners). It depends on...

Dividend discount model (DDM) is maybe one tool that can be used in fundamental analysis. It uses growth of dividends as an input, which would...

"Value investing" - buying securities that an investor believes are underpriced by some form of fundamental analysis. (ActEd, 09/2020) (This seems...

Hi, I wouldnt have said that growth shares cannot be selected using fundamental analysis. FA is basically looking at the fundamentals of a share...

Yes. If manager A gets (say) Rp - Rf = 4% and has vol = 2% then they have a sharpe of 2. If manager B gets Rp - Rf = 2% and has vol = 1% then...

Hi. This is quite an unusual chapter in the course. It is one of the least examined, as can be seen from the ASET cross reference grid which...

Hi, This does sound a bit odd, and you should certainly be able to access all of the sessions, audio + video, using the login and password sent to...

I agree that it is a tricky bit to fully understand. As you say, the repurchase price is set, and the repurchase of the gilt would not normally...