Thank you sir! I've been using the Pass Perf program and this video right here is 1000% easier and simpler to understand. I love it! thank you so much!!
Happy to help. Can't be fumbling around with parity calculations. Just had someone pass Series 7 yesterday and they had 3! There is also a separate parity lecture available too.
At minute marker 1 hour 1 minute, do you anticipate needing to calculate parity or conversion ratio on the SIE or is that more specific to the Series 7? Thank you so much for all of these helpful videos. They are a godsend as I make my way through this Kaplan material for the SIE!
@Series7Guru Hey Dean, do you have a helpful memory aid for remembering the difference between serial bonds vs series bonds? I can never make it stick. I keep mixing these two up. With your help I passed the SIE! On to the 7. Thanks for any help you can provide.
1:05:43 you talk about the Common Stock trading 2 "points" below parity. When I think of Basis Points, isn't it 0.01%? But you're giving "points" the value of $1.00 for a stock price. Can you clear this up? (I'm frequently confused by the industry using "points" or "basis points" to describe price or %, instead of saying price or %.)
Hi Dean, me again. I'd love to ask your opinion. I am only using your lectures a long with capital advantage lessons and the Kaplan QBank. I am not using a textbook, do you think it will be sufficient or should I fork out for a textbook. Writing on 6 April and the textbooks are expensive. I do have a finance background so the concepts of options etc aren't difficult, it's more the rules and regulations and nitty gritty that I'm experiencing for the first time. Thanks again!
Both Ken and I are pretty clear we are supplements to paid study materials. You should invest in a book. Series 7 for Dummies is pretty cheap. Ken has a link in his videos.
@@Series7Guru thank you! So you recommend that one? What do you think about achievable SIE or the STC? Where do you see the most value for money between those?
Maybe it’s not testable, but when you were talking about her receiving $24 million interest free per year, how did you calculate how much she gets every two weeks? I was thinking it would be $24 million/26=923,076.92. How did you get $166,000?
I'm struggling with Convertible Bond calculations. @ 1:00:32 is there supposed to be a period after "$40"? That sentence just doesn't make any sense without it. I know options really well, and look at Convertible Bonds like an OTM CALL. I just get lost with the language and need for some conversion formulas. Pre-Emptive Rights are also similar to a CALL, but make more sense. Convertible Bonds seem so unnecessarily complicated, or maybe I'm missing something. Intuitively, (for me) it just makes sense where if an issuer were offering a Convertible Bond, then the Conversion Price would always be given. It's like offering an option without an expiration. It's always given. Knowing these two, then you'll always then know the Conversion Ratio, because your Bond position value with match your Stock value at the Conversion price (minus fees). Parity, I would think, would always happen at the Stock Conversion Price (your CALL price), which should always be given, if you're buying a Convertible Bond. I'm confused by your calculation for Parity of the Stock at the bottom. Shouldn't it depend on your Bond PURCHASE price, not the Bond market price? I don't understand why you would have to calculate this at all, if the stock Conversion Price = the parity, and already given when buying a Bond.... (interestingly, just typing all this is therapeutic and is helping me to better understand Convertible Bonds. I had to edit it, and make new questions.)
The next slide is also confusing. I don't see calculating in reverse, unless you're trying to figure out your profit, when the stock prices goes beyond the Conversion Price. But in your example, you're labeling the Bond Price as "Parity". Maybe I'm just getting the term "parity" mixed up. I think I'm treating it like Cost Basis, but it's not. Parity is just to describe the equal value on the opposite side of a conversion, yes? Would it be accurate to say them, with currency conversion (assuming Pound/USD = 1.2), that the British Pound Parity, for $100USD is $120? Is that an accurate use of the term? Parity isn't used, or at least I haven't seen it, with currency conversions... "Parity" also isn't used in language translation. The converted price, is the called the converted price, not the parity price.. or the "parity" word for Car in Spanish. This may be where I'm getting mixed up. Does it sound like that to you, or something else?
I see your video just on Convertible Bonds, but I only need to know this for the SIE. I'm taking the 57 next and not the 7. I'm already struggle to know what I need to know, vs learning something else what I don't need to know. Or do you recommend I watch it anyway because it'll be better than for you to type your answer here?
Yes. Conversion price $40. Common stock is trading at $50 per share. For SIE just need to how to take the conversion price when issued and establish conversion ratio.
Thank you Dean, I appreciate your helpful videos. I would really like get these parity problems drilled into my head. Do you happen to have some additional practice questions to share?
