玲瓏心♪

Three month ago an investor pruchased a $1000 zero coupon bond with a maturity of exactly one year. At the time of the purchase it was priced to yield 7 percent(with annual compounding). The bond is currently priced to yield 6 percent. What is the three month return (annualized) on this investment if it is sold today?

a/10.06%

b/2.42%

c/5086%

d/6054%

先谢过各位大虾了。

1.        Ethics
Well, I believe that every note reader encountered the advice in the ethics session: we strongly recommend you read the handbook thoroughly before you start. However, many candidates are over dependent on notes, when preparing for the exam. Sadly, I am one of those guys. I was so confident that I thought that I could judge true from false by intuition. Unfortunately, the ethics questions are too tricky to be judged by intuition. Sometimes you will find all the answers seem quite reasonable.

Read your handbook carefully!! It’s warn, not advice!!

Pay attention to those samples. Do remember the rules and key figures.

You may use Ethics notes for review after you have finished reading the handbook, as it is quite plain.

2.        Quantitative Methods
I’ll say that quantitative notes are more than enough for the exam, however it looks boring. You will find the assigned book more vivid and practical. You actually learn from the cases in the real business world, and quantitative methods can also be applied to our daily life. The book does not seem like a monster, while the notes emphasises too much on the monster formulas which never ever appeared in the exam. Please do not waste you time memorizing those stupid monster formulas. Focus on the key concepts and basic calculations. The quantitative methods repeat themselves from time to time in the following sessions, like asset valuation and equity analysis. The level 1 exam correlates with the time series analysis and NPV concept significantly. If you do not have enough time, I will suggest you skip the quantitative book. You can do fairly well in the exam if you can answer all the questions attached with each quantitative session in the notes.

3.        Financial Statement Analysis (FSA)
FSA weighs the most heavily in the level 1 exam. I hate accounting. I am not of bean-counter style. When I was reading the assigned book “the use and analysis of financial statement analysis”, I found it annoying, for I had no prerequisite knowledge on accounting. I could not persuade myself fighting with the annoying book, which assumes that you know accounting well and skips many necessary explanation, although my friend recommend it as a nice book. I then bought the preliminary reading “financial accounting”. This one is really nice. I read it easily and I even heard my pace speeding up. When finished this book, I moved to another assigned reading “fundamentals of financial management”. This book is witty and practical. I strongly recommend you guys to read it, not only for the exam, but also for it helps in daily work.

When I started the FSA sessions in notes, I found everything was just a piece of cake with all those preparation work backed up. If I had not read those two books, I would have suffered when swallowing the FSA notes. I have to say that the FSA notes cover almost all the LOS that appeared in the June exam. If you have learnt accounting before, go directly to notes then. FSA was not as difficult as we perceived.

4.        Portfolio Management
We have only 12 portfolio questions, and most of them are quite straightforward. I like the portfolio book, as I think that it prepares me well for L1 and the forthcoming more advanced exams. However, notes are more than enough for you to tackle the L1 exam.

5.        Asset Valuation
Notes were bombed for it missed many important LOS in this section last year. My friend sat the L1 last June told me that at least 6-8 questions were never mentioned in the notes!! Notes improved somehow this year, however it still did not give enough lectures for this section. It twists on many history/introduction issues, however it did not catch the precise point.

6.        Fixed Income and Derivatives
I was so sorry that I wasted too much time from Dec to Feb, which I had allocated to assigned readings and notes. I did not even take a glance at those books. However the notes were rubbish for derivatives. It suddenly gives you a formula with limited explanatory words. You can hardly find out why and how to use them. Gosh~~~, I cannot figure out option value even now. That’s why I got lower than 50% in these two sections.

-Ling