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Kaplan CPA Australia Financial Risk Management Course

 

 

All relevant information on Kaplan Financial's CPA Australia Financial Risk Management Course will be posted on this webpage.

My contact email: thomas.wu@kaplan.com

Click to go directly to: (1) Updates, (2) Course Details, (3) Lecture Review, or (4) Course Outline and Lecture Notes.

 

 

 

UPDATES Back to top || Updates || Course Details || Lecture Review || Course Outline and Lecture Notes

Please check here for updates during the course.

March 16, 2016 Tutor support notes module 1, tutor support notes module 2, tutor support notes module 3
  Tutor support notes module 4, tutor support notes module 5, tutor support notes module 6
  Tutor support notes module 7, tutor support notes module 8
  Marked Kaplan notes introduction, module 1 and module 2
  Marked CPAA study text module 1
March 29, 2016
Questions from students:
Question: While going through FRM SG pg 175 & 174, Q3.3 (c), wouldn't it be sufficient to calculate and compare the EAA for both Machine X and Machine Y to answer the question?

Hence, going through to Step 3 in calculating their EAA PV would be just a waste of time if the question not specifically asked for it?
Answer: Part (a) and (b) was the incorrect way to do the question, i.e. just compare the NPV. Part (c) is the correct process of calculating the NPV and then calculate the EAC of each project. If the question just ask for a recommendation, just doing Step 1 and Step 2 (in the answer key) is adequate for the answer. Step 3 was done to show the total cost over time of both machine to prove that Y is cheaper. There are two situations in which EAC should be used, first is mutually exclusive projects as in Example 3.5 which gives positive NPV, the second is for machine replacement which is cost only for the production process and the machine is expected to be replaced over time. In the second situation which is called a replacement decision, it might be useful to know the total cost of using each machine on a continuous basis (since it is to be replaced when broken) which is calculated in Step 3.
Question: For the Learning Example 3.6 on pg 61 Tutor Support Notes, I don't quite get the figures/calculation given by the Solution.

My approach in tackling the question is by calculation the NPV, given the below data:-
CF 0 = 0
CF 1 to 4 = 6,000
CF 5 = 106,000
i = 8%

Bond market price = NPV = 92,014.58
Answer: Your answer is correct, the calculation in the Solution to 3.6 on p.61 of the support notes is incorrect.
Question: For the Learning Example 3.10 on pg 73 from the Tutor Support Notes, given that the effective annual interest rate for Investment A is higher than B, should not it also means A gives a higher return than B?

Why would the solution states that Investment B offers more interest?
Answer: You are correct, Investment A provides higher return / higher interest when compared to Investment B. The last statement in the answer key stating that Investment B pays more interest is incorrect.
   
April 12, 2016 Question:
  Q1:-

The equation for "c" on the Black-Scholes Model for Option Value on Tutor Support Notes pg 119 is different from the SG on pg 314.

On SG, the natural log is applied to the difference of the normal distribution of d1 and d2.

Whereas on the Tutor Support Notes, the natural log only applied to the normal distribution of d2.

The Solution for Learning Example 5.8 Tutor Support Notes on pg 121, uses the same equation as Tutor Support Notes (ie natural log only applies to normal distribution of d2).

Pls clarify.
   
  Answer: The correct formula for Black Scholes is the one in the Tutor Notes where the discounting only applies to the K * N(d2) and the risk free rate should be added in the nominator when calculating d1.
   
  Question:
  Values for N(d1) and N(d2) on Learning Example 5.8 on Tutor Support Notes on pg 121 are not given on the question. Should we automatically assume both figures are equal to 1 when values are not given in question's facts?

Is there any rationale of such presumption?
   
  Answer:
  N(d1) and N(d2) are the probabilities based on the normal distribution. It can range from 0 to 1 (which is the probability). It is not 1 all the time but have to look up the table to determine. If you retrieve a normal distribution table, you will calculate d1, and then look up d1 on the outer rim of the table to find the probability inside the table. As a result, it is very unlikely that you will be asked for N(d1) or N(d2); as mentioned in class, possible way to ask would be asking for you to calculate d1 or d2, or they will give you N(d1) and N(d2) and ask for the call option value.

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SESSION REVIEW Back to top || Updates || Course Details || Lecture Review || Course Outline and Lecture Notes

March 16, 2016 We went over the following topics today:
 
  • module 1,
  • ERM framework,
  • assess and treat risk,
  • financial risk,
  • module 2,
  • liquidity management,
  • working capital management,
  • turnover times and days calculations,
  • cash and operating cycle calculations, and
  • free cash flow calculations.
  Tutor support notes module 1, tutor support notes module 2, tutor support notes module 3
  Tutor support notes module 4, tutor support notes module 5, tutor support notes module 6
  Tutor support notes module 7, tutor support notes module 8
  Marked Kaplan notes introduction, module 1 and module 2
  Marked CPAA study text module 1
   
April 2, 2016 We went over the following topics today:
 
  • module 2,
  • sources of short and long term funding from debt and equity,
  • module 3,
  • ARR, payback, NPV, IRR,
  • relevant cash flow, tax benefits from depreciation,
  • WACC calculations, and
  • adjusted present value (APV) approach.
  Marked Kaplan notes module 2 and module 3 and module 4, marked tutor support notes module 3 and class notes.
   
April 7, 2016 We went over the following topics today:
 
  • module 4,
  • real options, embedded derivatives, financial derivatives,
  • use of forward, futures, swaps, and options.
  Marked Kaplan notes module 4, and marked tutor support notes module 4.
   
April 9, 2016 We went over the following topics today:
 
  • module 4 on options,
  • module 5 on heding of interest rate risk,
  • positive and negative interest rate gap,
  • interest rate swap,
  • cap, floor, and collar,
  • module 6 on hedging of foreign exchange and commodity risk,
  • foreign exchange swap,
  • module 7 hedge accounting,
  • treatment of embedded derivatives,
  • treatment of cash flow, net investment, and fair value hedges, and
  • criteria for the test of hedge effectiveness.
  Marked Kaplan notes module 4, module 5, module 6, and module 7.
  Marked tutor support notes module 4.
   

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COURSE OUTLINE AND LECTURE NOTES Back to top || Updates || Course Details || Lecture Review || Course Outline and Lecture Notes

This course outline is tentative and subject to change based on our progress. Please check the UPDATES section and table below for latest information.

Session 1 Module 1 to 2
March 16, 2016  
   
Session 2 and 3 Module 2 to 3
April 2, 2016  
   
Session 4 Module 3 to 4
April 7, 2016  
   
Session 5 and 6 Module 5 to 8
April 9, 2016  

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COURSE DETAILS Back to top || Updates || Course Details || Lecture Review || Course Outline and Lecture Notes

Course CPA Australia Financial Risk Management Module Course
   
Instructor

Dr. Thomas Wu
Email thomas.wu@kaplan.com
Website http://www.drthomaswu.com (all information for this course can be found here)
   
Financial Terms

There are specific terms that apply to accounting and finance, and there are various online sources that can help students understand these terms.

Download and print for reference:

Online finance dictionaries:

Other unverified sources of financial references:

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