[karanpreetrobin]

q1: there was no IHT as the cottage was sold.
CGT: As it was sold to connected party MV should have been used?

first year max pension could be 3600 ( as no relevant earnings)
second year up to 40k plus c/f allowance from last year

[karanpreetrobin]

I think you should as long as you calculated premium with spot rate and $ payment @ both strike prices (one after another). There was no contacts involved in this bit. You just had to show the worst outcome.

[karanpreetrobin]

I think you will only loose a mark
Obviously you multiply with the $ payments which was the main trick.

[karanpreetrobin]

You are correct on everything but put option.
I try to simplify- since we are multiplying if rates goes down (which is put option) we will benefit because lower rates multiply with $ payments lower outcome.
On the hand, we are only bothered if rates go up (call option) we will loose out money- higher rates multiply with $ payments-higher outcome.
So which one would you pick now? Obviously call?

[karanpreetrobin]

Cant remember but I thought there were no Contract size in OTC and OTC was a quote from a private bank and they had given the chargeable premium (which was already calculated in $)

[karanpreetrobin]

Since the Rates were other way around this time Euro/$ 0.89.

You will have to multiply the strike rate with the $payments, Therefore, you would want to protect yourself from paying more (As rates go up) so Call options. However, it was OTC, you could not trade on it so you had to show the worst outcome. (But I may well be wrong)

[karanpreetrobin]

Thanks. How many contacts were to sell/buy?
Did you go for buy or sell?

[karanpreetrobin]

Yh Hopefully we get at least passing marks
I dint even see last part of q4 properly LOL .
Well I am a Forex trader myself. It would be shame if I dont do hedging question.

[karanpreetrobin]

No I didnt see any duration as I only read the Project bit.

Did you do Q-2?

[karanpreetrobin]

Mine came Positive. It might be wrong as I only had just 25 minutes left to do the last question 🙁

[karanpreetrobin]

At least for me, Easy exam but very poor time management.
Correct me if I am wrong?
Question 1- A) Business risk and finance risk relations
B) Proposal 2 recommended due to it was bring WACC down.
C) Huge saving on proposal 1 due to less interest payments but still suggested proposal 2 because of future investments and growth etc. Lots of assumptions like CAPM, New beta Calculation Risk free rate, Tax rate, Market value of assets on sale etc.
Question 2- GOD!! I wasted hell a lot of time, Made so hard for myself.
Part-A)Futures-I divided $payment/future rate, and then divided by LOCK in Rate.
Sell/Short futures 55 contracts 5 months one
OTC Options- Nice and easy- Premium were already calculated 🙂
Buy Call options 6month expiry then showed the worst outcome. This time I multiplied the strike price with $payment.
B) Advantages using OTC options over future-GIVE AWAY
Flexibility, No binding, If things goes wrong we can always throw the options
C) Easiest question in the exam-
Mark to Market- Futures trading Open daily and close daily, Open next day again etc etc Calcuate the profit/loss accordingly-first 2 days was a loss and then 3 day was profit (I think)

Question 4) F9 Level Straight forward NPV
Sensitivity analysis Selling price to decrease 9.33% to bring NPV down to zero.
Few other recommendation like IRR, MIRR and VAR

Please correct me if you think anything mentioned above is wrong??

Thanks
Kaz

[karanpreetrobin]

Also, cant get my head around with tiny efficient market hypothesis scenarios like “company’s share price reacted from the information released yesterday”.
will that be weak or semi efficient market?

Thanks a lot John, God bless you!

[karanpreetrobin]

Correct answer is money market hegde lol
Because you can’t hedge interest rates and you can only hedge interest payments etc.
So curreny futures, options and forward agreement will hegde interest rate issues

[karanpreetrobin]

CAPM was super easy!
Just explained how it can be used and wacc becomes irrelevant when existing capital structure changes or investment in different markets.
For hebac co. CAPM equity would have been much better than wacc.
Also, just explained how to use capm and asset beta etc

[karanpreetrobin]

Question was on smallest impact- which would would be divided policy.
Balancing figure 181 (150 scrap needed to adjust at the end of project)

[karanpreetrobin]

Absolutely bang on!!!
But one slightly bit problem.
Yours heading are other way around though.
It was size planning & share operational.

[karanpreetrobin]

good luck mate lol

[karanpreetrobin]

googled cost plus costing
“cost-plus pricing can offer competitive stability if all firms adopt cost-plus pricing”

[karanpreetrobin]

cost plus pricing
first two options (stability and retail)

[karanpreetrobin]

20th was rolling budget it was deffo A,

1st mcq was A too

learning rate 75%, Bep 24000, revised mark up 37.8%,
variance was both proportion ones 2and4

[karanpreetrobin]

i have written all mcq answers on my hand if you have done so we can match them lol

[karanpreetrobin]

According to Bpp they have stated the new added quarter q1 rather than 4th

their answer is for example after q1 results.
q2 2013
q3 2013
q4 2013
q1 2014

As far as I remember question asked for q4 sales value rather than 4th quarter, according to bpp answer it should have been A

[karanpreetrobin]

I put A for 20th

[karanpreetrobin]

dont know but i thought you only find joint bottleneck source if it is process, eg if it was a process of one unit and goes through a b c then it was machine hours for sure.
they rather 3 different products so needed to look individually i guess but not 100%

[karanpreetrobin]

no only two
effectiveness means how successful we are.?

so no of students made it to further education on schedule?
and no of students passed or some sort of success etc?

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