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I think this might be another question… I think it was talking about Rental income of which withholding tax has been deducted….in the country of farania ….,
I’m not sure which of the two
But for this …the calculation suppose to be
Total rent (add back 30% withholding) 100/70 * 6537………..9338
Less income tax
Less dTR…30%Etc
It was investment property …..the effect if it is treated as FHL-
the reliefs and exemptions48….work really hard…new everything in the exam
Practice every question in bbp exam kitsupergaga/
The volatility in real pricing is the standard deviation. The sd is the square root of the variance. The variance is derive from the difference between the mean and the individual variables. To answer the question …it was possible to find the variance but variance cannot adequately tell the pattern of probabilities. In this question the use of expected value to solve the cash flow was the appropriate method or even decision tree.It was not compulsory to use blackshool in this question bcos attempting it would be like difficult to ascertain the volatility. But if u have used it fine and also if not fine. The examiner was testing expected values and decision tree for the cash flows.
Below is the comment of the examiner in one of his articles‘A commonly used way of evaluating decisions is via the use of expected values.
An expected value summarises all the different possible outcomes by weighting the possible outcomes by their probabilities and then summing the result.
Problems where one or more decisions have to be taken can become more complex and may require the use of a decision tree, with expected values being used to evaluate each of the decisions.
A decision tree is a diagrammatic representation of a problem, where the decision maker needs to consider the logical sequence of events.
Since one event may depend upon another, we may get situations where event one has a certain probability of occurring and event two, which depends on event one occurring, has another probability of occurring. In such circumstances, we have a situation of combined probabilities
Eg if event one has a 0.6 chance of occurring and subsequent event two a 0.75 chance of occurring, then overall the probability of both events occurring is:
0.6 x 0.75 = 0.45
ie a 45% chance of occurring.We shall look at such concepts in the following example, which demonstrates how techniques acquired in Papers F5 and F9 can be used in the Professional level papers.
Supergage if u use 77%….it was still not possible for g to be bigger than ke. Ke was given as 11% ….so if u use g according to ur cal should have been 11%* 77=8%….if u uses 23. Something % g would have been 2.4 I think
U calculate the total of the proxy company first…..
Then u calculate the component beta
In this exam ….should have beenTb=luxury bata + non-luxury beta
