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2008 AM, Q5 A (i)

My question -given that The Grinold-Kroner model can be expressed as:
E(Re) = (D/P -

Hey mcap11, congrats on passing level 3.  It was nice to see we made it thru together.   Can’t believe how much time went by since level 1 (dec 08).  Best of luck.

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bump again!!!
hahahahaha
this stuff is gold, Jerry…GOLD!

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Monk, I dont know what to tell you other than you are wrong.
Good luck on Saturday, my friend.

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You know what, you’re right. Please make sure you change the sign Saturday!

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Also -se from the readings that  -

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Forget about the sign. The sign is part of the expression. We are not talking about “Delta S” but “minus delta S”
hence if you just need to plug the figure if your given the repurchase yield
Read again your quote from Grinold: “the second term - delta S… Equals the repurchase yield”. The sign is included in the term!!!
And what are you given? The repruchase yield! Wow..
no need to touch the sign in the final equation!

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And the question says

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No-look at the reading Detla S is the change in the numbe of shares, it is not the change in return that arises from the change in shares:


page 35,Volume 3,CFAI Readings :
The term

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if the repurchase yield is negative, that means the change in shares is positive…there was an increase in shares…
so in the formula, which is the change in shares (NOT THE REPURCHASE YIELD), is positive, so you have: 4.0 - 0.5 = 3.5%

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