*** F9 December 2013 Exam was.. Post your comments ***

@generations, I thought the islamic question asked about how the system operates financially as interest is forbidden (Hope I didnot mis-interpret it).
I wrote about
1) There must be an underlying asset on which the funds are tied.
2) Profits and losses (on the underlying asset) are shared according to the contract except in mudaraba (equity finance) loss borne by equity owner.
3) Islamic finance therefor acts like a form of partnership and funds (loan) holders will be more involved in the affairs of the company until such a time the loan is paid back.
*Anyone answered along those lines or I’m I off track.

Did anyone use the three theories behind the normal yield curve shape (Liquidiy, expection and market segmentation) to answer the question about differences in interest rates between short-term and long-term securities (something like that)?

The rest of the theories, I think I answered as you did.

9.18%

hey @neilsolaris….

are you sitting for P1 as well? Its killing. Done all past year questions. Wrote down the answers in notes form. Read technical articles. Now….Just Pray and Re read the written notes.

Good luck to you and anyone sitting for P1

Regards
Haseena

F9 was splendid. Thank you Jesus, thank you open tuition and thank you Mr John for your outstanding lecture. God bless you richly. What I would have paid heavily for was given to me free of charge. Indeed the best things of life are free

I used the three theories behind the normal yield curve shape (Liquidiy, expection and market segmentation) to answer the question about differences in interest rates between short-term and long-term securities. But with M&M theiry in cap structure I don’t know why I wrote about business risk financial risk and project specific cost. Silly me!

It was the easiest exam in the history of F9 past exams. I couldn’t manage the Q3 part c and left 50% of part a. I am hoping that i will easily get at least 50. let see and wish good luck for all other students.

The paper was quite manageable Q1 which required nominal and real rate. I only had difficulties on Q2 am sure due to inadequate preparation otherwise generally it was fair, the June 2014 one may be tougher.

Hey @neilsolaris…

I wrote a big article…I guess opentuition didn’t like it. It didn’t come up at all.

This is my rewrite. Yes, I did attempt it this december.

As I told someone earlier about F8…..but P papers are different level. Real professional. Vocabulary is important.

PRACTICE PRACTICE PRACTICE………I only read opentuition notes and practice past year papers. Read technical articles as well.

Another one thing is …..if you believe in God. PRAY EVERYDAY. The one that is marking our papers are still human beings.
Only God Knows whats in their mind while marking LOL

Good Luck

Regards
Haseena

Hello Colleagues!

The paper was manageable if you can wright at least 90WPM, and grab the main points at the first read of the question. I found my self reading the questions 2 -3 times; taking note of the main points. In addition to what have been said before, question 1 & 2 occupied most of the exam time and the pressure mount. I made mistakes in the exam trying to complete a much as possible and had to work the question again – identifying the errors that I made in the exam. I cannot correct that, but develop more competence and speed – hoping for Jehovah God mercy for a PASS – SITTING THIS PAPER from 2004. I failed marginally each time.

Q1 NPV using nominal terms takes the effects of inflation and thus the discount rate which is applicable is 12%. The market research cost of $200 must be ignore – sunk cost, and each year contribution MUST be inflated (1.047; 1.047*2 etc….) The working capital requirement computed on sale should be claimed in the final year of the project – Y4 and WC at Y0 $131 must be added to the investment. It is the incremental we claim each year – resulting $247 in Y3 & $544 for Y4.

Under this method – nominal terms the project will increase profit by $3.945M and must be accepted as it will contribute to the shareholders wealth maximization. Under the other method – REAL terms the cost of capital (DF) is 7%. We must eliminate inflation effect by 1.12/1.047 – 1*100=7%. I used the sated figures because they’re before the effect of inflation. This gives an NPV = $6100 – (125 wc Y0 + 2000) =$3.975. Please note that I round the figures, as I always if the examiner does not specified working to the nearest 1000.

The project is accepted under both method and this question was testing the ability on working capital and inflation effects. I am hoping to grab a 50% or above; it does not matter I WANT 2 PASS. The theory aspect of the paper was fair, but I may have mist the easy marks – trying to get the calculations correct. God deliver; Thank you OT!!!!!!!!!!

@chamith – The lease or buy question is straight forward, but most candidates seems to mist the points. I agree with you, that there was no cost of capital or any other percentage to calculate the present value. The question is silent and thus one must determine the type of lease it was. There are TWO type of lease – Finance which carries an interest rate and Operating lease which has a minimal charge.

When you calculate the value of the lease over the period – five years, there is 25,000 dollars above the outlay cost and this is consider to be service cost. It less than 7% that of the bank loan which gives a higher charge and thus the lease was more attractive as its interest rate per annum was less than one percent. The real comparison now is the attractiveness of operating lease – which we should discuss for the 10 point answer.

This question was too easy why so much consideration or we may have been prepared mechanical and thus could not see the picture of the examiner. Please take the time and do the questions again – it will give you peace and some assurance that you have been successfully; do not forget that it also will cement your knowledge of the subject.

Base on your out of exam answer and the assessment of the result to come February 8, 2014; Take a break and continue to practice your weak points – whichever area of the syllabus you have difficulties understanding. You must also work those questions within the area(s). If you notice that the writing part of the paper was for us to grab easy marks, but most of us were caught with the calculations. This examiner do not repeat questions that you can spot and he knows how to confuse his candidates. May GOD grant us mercy and exam passes – we need it Jehovah God. Thank you LORD!!!!!!!!!!

in Q1 where there was a nominal terms NPV and a real terms NPV, for the working capital, i inflated the cash flows and then worked out incremental working capital for the nominal terms section, and for the real terms section, i used cash flows that were not inflated, so each NPV had different incremental Working capital figures was this correct?