Thanks. I guess now I have a bit of an idea on how it works especially if you take share price to be the present value of future cashflows. In the answer, they should have given the 'ex-dividend' valuation concept as the reason. The no arbitrage reason is unclear.
Anyway, I wonder if IFOA is supervised by any examinations regulatory body. I'll follow up on this after the exams especially if the pass rate will still be 30%.
Last edited by a moderator: Sep 24, 2019