标题: Ethics and Riskless Arbitrage [打印本页] 作者: torontoanalyst 时间: 2011-7-13 16:23 标题: Ethics and Riskless Arbitrage
I hate the way Schweser 's mock exams take liberties with words
e.e. AF 3 of Bk2 has this one that I got wrong:
In describing these trading opportunities to clients Trent suggests that "clients willing to participate in this type of arbitrage strategy are guaranteed riskless profits until market prices return to equilibrium"
The para also has some stuff to do with interest rate differentials and forward rates .
Since when is a forward contract riskless ? Assuming it is not ( because of credit risks ) , I answered that it is against CFA inst. standards to clainm "guarnteed riskless profits"
Was I right? I think so, but Schweser doesn't think so.作者: FinancialAnaly 时间: 2011-7-13 16:23
I got that answer too, chalk it up to a poor Schweser question. I bet it CFAI asked that it would be a violation. In my mind, the only riskless securities are Treasuries and CDs.
NO EXCUSES作者: RMontgomery 时间: 2011-7-13 16:23
bpdulog Wrote:
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> I got that answer too, chalk it up to a poor
> Schweser question. I bet it CFAI asked that it
> would be a violation. In my mind, the only
> riskless securities are Treasuries and CDs.
Assumed to be riskless for the majority CFA topics. In fact they are not.
