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ACCA F9 Capital asset pricing model (part b)
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OpenTuition Zindabad(long live)! 馃檪
Thank you 馃檪
I have never seen a topic one used to consider mysterious rendered so powerless and elementary. Prof, the lecture is crytstal clear and the delivery excellent!
Thank you 馃檪
watching ur lectures is like watching a classic david lean movie: the delivery and the message of the dialogue is, simply put, terrific!
Thank you 馃檪
Is it true that if the B=0.8 then it means that it鈥檚 20% less Risky then the Market, So the Premium we want will be 20% less then the Market(i.e 8%) that鈥檚 why in Example No.2 we Subtract 20% then the Market Premium(i.e 8%)
Ex= 20% of 8 is 1.6
8-1.6=6.4
The Premium we want will be 6.4%
Yes – that is what I say in the lecture and what we arrive at using the formula 馃檪
if beta= 2 it means that investemnt is 2 time more risky than the market value is it right ?
It is two times as risky as the market i.e. the stock exchange as a whole.
Hi, May I know for chapter 20 Example 4 why must 1/0.13 not 0.13 at df@10% there ?
Firstly the required return is 6% + 1.4 x (11% – 6%) = 13%. (I don’t know where you have got 10% from).
Secondly, since we are discounting a perpetuity, the discount factor is 1/r. So in this case we multiply by 1/0.13
(If you are unsure about perpetuities then watch the earlier lecture on investment appraisal methods)
Thanks
Thanks.
I think he got the 10% from the answers to the examples in the notes where it states df @ 10%… PV @ 10%… Whilst it is clear that you have not used these, they confused me also. Can you confirm that this is an error? Many thanks,
Yes – it is just a typing error. I will have it corrected.
The workings are correct, and more importantly the lecture working through the example is correct.
Thank you for the lecture..F9 here i come..im ready, thanks to open tuition
I know you’ve shown us how to calculate Beta and you said that the examiner is not likely to ask us to calculate Beta but I was told by my workplace mentor that if beta is not given, then make a note to the examiner that I am assuming Beta is 1 and continue as such… Will this cost me any marks?
You will either be given beta, or you will be asked to find beta by using the formula backwards (although this is not so likely).
You certainly will not be asked to calculate beta from other information – that is not in the syllabus for F9.
However – and this applies to all questions – if for any reason you cannot find a figure you need (probably because it is always harder in the exam with time pressure and panicking) then do invent a figure so you can still prove that you know what to do with it.
You will lose marks, but nowhere near as many marks as you would have lost if you just gave up on the question.
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Thank you for helping, through your humble yet formidable teachings, a slow learner like me is seeing hope
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Thank you 馃檪
I completely agree! – I was going to comment the same thing! Mr John always says sorry, I have to talk! I find it amusing when he discusses things, he removes my doubts and makes things clearer.
It was a great class…thank you
keep up the good work
Thank you so much for these lecture, you have made it more simplier for me to understand. Thank you Open Tuition
i find these series very helpful to my success in f9. i am sure any body can pass with it. now am studying p4, i have go over it another time to solidify my basis.
thanks to the entire team of opentuition
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CAPM is the most difficult f9 topic in the studytext for me…and now after viewing this lecture, its a piece of cake:-) thank you again john!
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