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Investment / Financial Markets Old Exam MFE Forum

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  #261  
Old 11-23-2017, 09:07 AM
SpanishActuary SpanishActuary is offline
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I am soooooooooooo angry with myself. I have failed 2 super easy questions, so maybe that makes me fail. Now, it is time to wait. I hate not having instant results!!!!
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  #262  
Old 11-23-2017, 12:49 PM
BlueFire49 BlueFire49 is offline
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I am soooooooooooo angry with myself. I have failed 2 super easy questions, so maybe that makes me fail. Now, it is time to wait. I hate not having instant results!!!!
Lol I feel you on that. There was a question i should have gotten right but somehow I didn't get a answer choice and then figuring it out after the exam I answered a question wrong that i should have gotten right.
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  #263  
Old 11-24-2017, 10:12 PM
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The exam was fair. I felt very confident my first ten, then skipped around a bit.

I'm almost certain I passed. I'm going to finish up my last VEE and study for exam C.

Best of luck to everyone, it's been a fun ride with a lot of ups and downs.

cheers,

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  #264  
Old 11-25-2017, 04:50 PM
KD24 KD24 is offline
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Are we allowed to discuss questions? There were 2 that I'm dying to know if I got right or not...
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  #265  
Old 11-25-2017, 05:37 PM
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Are we allowed to discuss questions? There were 2 that I'm dying to know if I got right or not...
Concepts, yes. Specific questions, no.

I think a reasonable workaround may be to change details/numbers so that it's no longer an "exam question." Someone who knows more about this, correct me if I'm wrong.
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  #266  
Old 11-25-2017, 07:00 PM
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There was one involving sharpe ratio that for some reason I didn't get any of the answer choices, but I just chose the closest answer choice which was like 0.07 off.

Also anyone know if the borrowing rate is typically known or not?
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  #267  
Old 11-25-2017, 11:07 PM
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There was one involving sharpe ratio that for some reason I didn't get any of the answer choices, but I just chose the closest answer choice which was like 0.07 off.

Also anyone know if the borrowing rate is typically known or not?
I'm not sure what the context is, but if the Black-Scholes framework is assumed, then the borrowing rate = risk-free rate, since one of the assumptions under the Black-Scholes framework is that investors can borrow or lend at the risk-free rate.
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  #268  
Old 11-26-2017, 02:30 PM
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I'm not sure what the context is, but if the Black-Scholes framework is assumed, then the borrowing rate = risk-free rate, since one of the assumptions under the Black-Scholes framework is that investors can borrow or lend at the risk-free rate.
Is it true that the expected price of a stock should be higher than the forward price even with dividends?
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  #269  
Old 11-26-2017, 06:40 PM
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Is it true that the expected price of a stock should be higher than the forward price even with dividends?
Correct. Recall that:
- Expected Stock Price at time T = S(0)*exp[(alpha - delta)T]
- Forward Price at time T = S(0)*exp[(r - delta)T]

Assuming both alpha and r are greater than the dividend yield, since alpha > r, the expected stock price is greater than an equivalent forward price.
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  #270  
Old 11-26-2017, 08:09 PM
LyActuary LyActuary is offline
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OMG. Do we all have the same questions? I feel like I've seen those.
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