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Sfm today paper

(Guest)

Ca Finalists..

any budy tell us how was today SFM paer?
Hope for Best to all.

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15 Replies

rohit (student) (360 Points)
Replied 03 November 2012

The paper was easy

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(Guest)

Please describe about Chapters Q tricks etc.

are Q from RTPs and PM.

Kanhaiya (Treasury) (245 Points)
Replied 03 November 2012

tough paper no questions from leasing, capital budgeting. ... paper is full of m&a, valuation of business

(Guest)

Ok... and RTP & PM Role in today paper.
Aisa feel ho raha hai insti kuch particular topic pe focus kar rahi h na ki whole syllabus ko touch karne ki.

May God fulfil all ur wishes Dear

(Guest)

Ma frnds also say Easy.

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priya shukla (CA final) (133 Points)
Replied 03 November 2012

step marking hoti hai kya sfm mai?

M. N. JHA (CA) (8316 Points)
Replied 03 November 2012

My answer- 1(a)105, (c) 76.47,(d) 57.13, 5.87, _3(a) 160.5, 14, 10.5 (b) 115.15, 115.77_ 4(a) 75, 18.4, (b) 10.21, _5(a)28, 7.44%,7.96,overvalued, (b) increase by 17.7 , _6(a)2708.92,5308,3229.56,847, (b)63.75,37.5,24

1 Like

shyamsoni (jaipur) (68 Points)
Replied 03 November 2012

farzi paper the abitk k.

CA Rahul Sharma (Asisstant Manager Finance) (697 Points)
Replied 03 November 2012

any one plzzz tell dat in Q 2a whether defered tax asset is to be taken or not in net assets.

& in interest coverage ratio whether working capital loan is to be taen or not.?????????????

(Guest)

I think workin cap loan ws to be taken for interest coverage bcoz it is also an obligation to be paid by the entity.. and ya i did a few sums where DTA is considered for Net Assets.. since tax benefits are tranfered to the merged entity... i did it lyk dat.. lets c..

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*RENU SINGH * (✩ §m!ℓ!ñġ €ม€§ fℓม!ñġ ђ♪gђ✩ ) (21627 Points)
Replied 04 November 2012

soothing wrds ....sfm paper was easy ..

in last attempt, sfm was bit tough ...

let's see how it goes in our attempt

CA Rahul Sharma (Asisstant Manager Finance) (697 Points)
Replied 04 November 2012

thnx pranita, i hav also same opinion n do that in exam bt not very sure, well hope it will b right

agar right hua to maja aa jaega.......

CA Saket Mittal (BUSINESSMAN) (99 Points)
Replied 04 November 2012

hey guys ppr was easy. bt i got lil confuse in Q 3 in its part 2 and 3 As in 2nd part Q asks value of option at end of 4 months" if exercise price price prevails". in my opinion it should b "if exepected price prevalis" as exercise price never changes. so my ans is (160.50-150) = Rs.10.50 in 2nd part And in third part i got it by following:- 0+0+10*0.50+30*0.10+40*0.15=Rs.14(so expected value of option is Rs. 14) plz cn ny one tell if m i right..

manoj kanthi (Asst.General Manager-Treasury) (99 Points)
Replied 05 November 2012

hey guy,

some solution of some particular ques on SFM. This is only one of possible soln, there can be other possible solution also. since i Handle forex and treasury product in my job i tried to solve this question

1 a) Walters model

P= D+ (E-D) r/ke

= 1.5 + (6-1.5)0.20/0.10

0.10

=105

1b) Current price = Face value x (1- D x days to maturity)

360

= 100 x (1- 0.08 x 90/360)

= 100 x (1- 0.02)

= 98

Bond Equivalent yield = Face value- current price x 360

Current price Maturity period

= (100-98 )/98 x 360/90

= 8.16%

= Discount rate .

1- (Disc. Rate x days to maturity)

360

= 0.08

1- (0.08 x 90/360)

= 0.08/0.98

= 8.16%

1d)

i) since the base currency (USD) interest rate is lower than variable currency(INR) the Base Currency( USD) should always command premium over Variable currency(INR). So US Dollar will be at premium in Indian Forex Market.

ii) F = (1+rv) F is the forward rate and S is the spot rate rv = Interest rate

S (1+rb) of variable currency, rb=Interest rate of base currency

F = (1+0.10 x 6/12)

55.50 (1+0.04 x 6/12)

F = (1.05)

55.50 (1.02)

Forward rate for 6 month is 57.13

Premia % = = F – S x 12 x 100

S n

= (57.13 -55.50)/55.50 x 12/6 x 100

= 5.87%

3a)

Expected price(A)	Prob (B)	Product (Ax B)	Value of (C)	Expected value of call (B x C)
120	0.05	6	0	0
140	0.20	28	0	0
160	0.50	80	10	5
180	0.10	18	30	3
190	0.15	28.5	40	6
Expected value after 4 month		160.50		14

expected price after 4 month Rs. 160.50
if u read the question it has given Value of call if exercise price prevail and not expected price at the end of 4 months so if at the end of 4th month the price of asset is equivalent to exercise price of 150 then the value of call will be zero.( if the spot price will be 150 then it will equal to exercise price then the value of call is nil as the buyer will be indifferent). if the question would have specified exercise price prevails then the answer would have been different.. There may be other way of interpreting this question too.
If option is held till maturity expected value of call is 14

3b) option of paying in 60 days

Outflow ($ 2000000 x 57.10) 114,200,000.00

Option of paying in 90 days