AuthorTopic: reading 72 in the CFA curriculum
@2008-10-25 17:38:53
Can anybody help with problem 8 in the book in reading 72?

I get the fact that the initiation price is 150 but I don't get why the settlement price on day is $150 because shouldn't the short post variation margins to meet the initial margin instead of the maintenance margin??
@2008-11-01 03:08:32

You are right, this might be one of those errors in the book. Although, when you read the question, it is stated there that the call is "maintenance margin call" or sufficient to meet any maintenance margin call. In cases like these what I do normally is do a process of elimination on the answers, for example in this case, if we use the do deposit variation margin, margin balance would have been 160, but there is no 160 in the possible answers so the closest that we could get is $150. Sometimes I give this kind of question a benefit of a doubt. Thanks!
@2008-11-03 18:16:53
@2008-11-13 11:24:05
i'm pretty sure they eliminated this question...check the errata pdf.
@2008-11-16 10:00:17
Your question: Which financial statement would be most useful to an analyst who wants to evaluate a company's liquidity position and financial flexibility?

Your choices include both Statement of Cash flows and Balance Sheet. You identified Balance Sheet as the correct answer, which is consistent with CFA study materials.

On page 17 of CFA chapter 29 as well as in the chapter summary (page 31) , CFA explicitely stated and I quote "the cash flow statement helps creditors, investors, and other statement users evaluate the company's liquidity, solvency, and financial flexibility".

CFA Discussion Topic: reading 72 in the CFA curriculum

To post a new topic or reply to a topic, please log in or register for a free user account.

I used your notes and passed ... highly recommended!