I'm about to start studying for SP5 and wanted to find out if there is any required further reading. For example, SP9 required us to read James Lam and Paul Sweeting, but the SP5 notes have made no mention of any further reading, just the accreditation.]]>

I am not clear with below mentioned core reading. Please explain with the help of an example.

I

Thanks

Ayushi]]>

individual bonds which seem cheap or dear in relation to other bonds. However, because

high-coupon bonds are likely to have higher gross yields than low coupons, a high gross

yield does not in itself indicate that a bond...

Bond Anomaly and Switching - Identifying Cheap or Dear]]>

Taxation]]>

Can someone explain what admissibility restriction mean ? and Also explanation of solution.

I am adding the solution here:

Admissibility restrictions]]>

Passive investment managers are, typically, index-trackers who manage assets without attempting to generate any outperformance from making superior investment decisions. Instead, their objective is to track closely the performance of a specified equity index. This offers the advantages of lower cost and volatility

Chapter 21ortfolio Management(1)]]>

Can someone please help me understand by giving example what these course notes mean ?

- "This could be the case for a fund that is distributed between various specialist active managers, each of whom has been given a particular benchmark to beat. The aggregate of all of the benchmarks given to the specialist managers may not be exactly the same as the overall benchmark for the fund."

- "A large fund will have sufficient funds in each asset category to employ...

Structural risk]]>

Just wanted to ask how did everyone feel about the examination?]]>

Following are the core reading:

There is typically only a limited range of circumstances in which an individual bond will outperform its peers and provide a higher return than its yield-to-maturity at the point of purchase, which include:

- The issuer’s perceived creditworthiness being upgraded or ‘corrected’ relative to other issuers – for example, a credit ratings upgrade – resulting in an upward adjustment in the bond’s...

Active Bond management]]>

Based on the example, I think it is foreign per unit of domestic currency.

Let me know if my understanding is right or there are other ways to approach such questions?

Thanks]]>

Chapter 18: Practice question 18.3]]>

Based on my understanding we should have used this year January, April, July and October dividend yield. The investment income should be based on quarter start market value , right?

Also , Please help me understand the three note bullet points just after the calculation of investment income of first three months.

Thanks

A]]>

Am looking at the performance fee calculation for fund B on part (ii) of Q7 on the September 2017 paper. The performance fee for t=1 is showing as 0.384 in the solutions. However, am getting 20% *(108-100) = 1.60.

Does anyone know 0.384 is found?

Thanks,

M]]>

This question also applies to the exams in general, was wondering if we are allowed to copy and paste our excel workings into our Word exam script? For example, question 5 from April 2021 ST5 paper. The tax calcs can easier be done in excel. Is this allowed?

Thanks]]>

I was hoping someone could assist with my understanding for the Sep 19 Q4 and Apr 09 Q3iv.

September 2019 Q4

The main query for this question is around figuring out if the investor should buy or sell the future which I'm struggling to get my head around. I am happy with the derivation of the Future rate of 1.1614 dollars per euro.

Any help on why they would buy or sell the future at this stage would be appreciated!

April 09 Q3iv

It is a smaller query for this...

Sep 19 Q4 and Apr 09 Q3]]>

This question involves a tax calculation. I am a bit confused as the investor has a Fixed Income Fund which has a valuation at the end of each year. I did not include this in my calculation because there is no explicit tax rate for this type investment, other than the interest income which is shown as a separate value. However, the solutions state that the FI fund should be treated as an overseas investment but I can't find any mention of this or hint in the question.

Is there...

Revision Notes; Q22 section 1 (April 2019, Q5)]]>

Need help with understanding few alternative solutions to examiner's report. Want to check if my understanding is correct.

Q6. part v)and vi) can we suggest

- how to value income from assets ; by assuming that income from asset is included in year end value of asset
- investment return largely affected by cashflows which is the investment amount and beyond the control of fund manager; using time weighted rate of return if sufficient data is available.

Thanks,

M]]>

Can someone help in clarifying these questions from April 2021 session?

Q4- part v)

The term of risk free rates given isn't very clear to me. For calculating forward price for 2 year forward, are we assuming that risk free rate is for 2 year period and not as at given date? In the accumulation factor, I was assuming 1.2% for year 1, 1.3% for year 2 and so on until I looked at the solution.

Also, when calculating total profit/loss on each forward, the final step is giving me a...

April 2021]]>

I was wondering if anyone would be able to help me with ST5 April 2012 Question 2. This question is to do with futures rate to forward rate equation, however I am struggling to get my head around the intuition of the formula. I appreciate the answer could be obtained through following the example in the CMP on page 380 but I don't quite follow the formula logic.

I understand why future prices and forward prices would differ for the interest rate future/forward.

Thanks in advance]]>