May 2026 AFM Was Tough for Everyone - AFM Way Forward & Suggested Answers

Added: 2026-05-12

[00:00:00]Uh namaste friends. Uh so today's video is on the uh suggested answers for your May 26 AFM exam as well the future strategy. In fact mostly I'll talk on the strategy for your future exams first and then I come to the suggested answers. I most of us are aware that the paper was extremely challenging and many students I think vast majority of the students were finding the paper to be on the tougher side. We saw lot of unseen questions lot of concepts were not directly available in the study material. So it was very very challenging for students and I somehow believe that whatever you guys felt during that exam is right. The video first will focus on what can we do for the next set of exams. I'm not even talking on the suggested answers now.

[00:00:59]Suggested I'll discuss in some time.

[00:01:02]I'll not spend much time on the suggested answers. major time let us spend on what should be the strategy for future exams. How do I tackle my future exam? Now uh most of you guys have been asking me what should we do for next set of exams and uh there are students who are extremely worried people who have written the exam okay but people who haven't written the exam and who are preparing for your November exam or maybe the next year exam these guys are under lot of stress lot of pressure is there now few things I I want to make it very clear to you because unfortunately we faculties have a small role in the pressure which you guys are facing at this point of time because you see lots of videos and every video tells you something and unfortunately you get carried away because I have been observing what is happening after the exams have got over and and and first point is What to do if if paper is tough like the one we did? Paper is tough like the one you have faced. What should we do for the next set of articles? Now the paper can be tougher.

[00:02:33]People are now asking should we solve should we solve difficult questions? This is a doubt many students are having. Should I solve AI drafted questions?

[00:02:49]Should I do something else? Uh there are teachers who are coming out with difficult modules, difficult questions.

[00:02:59]You can do everything you wish to but I can tell you with my experience. You solve 100 difficult question ICI will ask 101st difficult question and unless concepts are very clear that 101st question also you're going to struggle so what should you do is not not increase the number of questions now go to the depth of everything which is there in ICI study material depth depth means in-depth preparation of every concept in-depth preparation of every concept which is there in the ICI material rather than enhancing the number of questions focus on ICI study material and go to depth depth of everything depth of everything at a depth level you'll have to understand rather than trying to practice many question so my sincere request to students is whether you are my student or any other student don't chase don't chase any difficult questions now chasing that will not help because when when I used to teach maybe 900 questions in my classes then I have cut it down also when we used to do 900 questions also and any new question used to come in exam students were struggling that time also they were struggling that time also so if we do more questions what you are indirectly doing is you're practicing lot of questions but you're not getting into the depth of every question so when I say depth I'll explain you lot of concepts what happened in exam every question I'll tell you what if at all we had gone in detail into something and maybe then managed it in exam it would have been easier to handle but we have a simple learning some learning is there and that uh extra clarity is not there because of which small change in questioning pattern and most of us are struggling somewhere we as faculties have also prepared you are made students tends to go in that order in that track you are not coming out of the track because ICI has suddenly suddenly given a tougher extremely tougher paper I'll not say anything else it was the toughest paper in the ICI history okay if papers should you do difficult questions to prepare for it my answer is no should you do AI drafted questions again my answer is no then what should you do read a concept cept maybe put that concept onto the AI if at all you want to and try to learn more about that concept ask the AI can you tell me more about this point what are the key conclusions key points ask your doubts get your doubts clarified because ICI has asked questions from even small small points in the study material and this is what I saw in IBS paper also but IBS at least is open book this is not open book so we struggled paper becomes tougher no need to prepare for any extra question because even if you prepare for extra question you will still not be able to manage the paper or you have not been able to manage the paper. Good conceptual clarity there maybe you'll be able to manage. Second point, no selective preparation.

[00:06:24]The selective preparation story is not going to work out. You ask for ABC analysis. You ask for important questions. I have given my priority material questions. The priority material questions obviously the main question itself has not come in exam.

[00:06:39]Where is the question going to come from? Priority material. But selective preparation is not going to work about now. Just doing selective preparation will not work. Yes, you can mark your set of questions you want to revise but no selective preparation. You will have to do all concepts in depth. All concepts in depth. Even areas which are not tested for a very long period like black should model got tested. Sharpace model optimal portfolio got tested the second consecutive time. Last time itself students were very unhappy with that model and suddenly the second consecutive time they have tested and students struggled even the second consecutive time with that. So no selective preparation. Third point is theory is game changer. Theory is going to be game changer for most of you guys. It is a game changer. If you have prepared well even in the latest attempt theory could have become a game changanger.

[00:07:35]Theory doesn't mean those five chapters only. We do tell those five chapters. We have seen what has been happening in the past. This attempt also from the five chapter 16 out of 24 marks theory came but still that alone is not sufficient.

[00:07:48]If id read everything maybe I could have handled more questions. I could have handled some of the other questions which are there. So theory is a game changer. Again no selective preparation in theory. Theory also you can't do any any selective preparation. So this is the biggest problem we are facing at this point of time. Paper can be tough.

[00:08:07]Doing more questions is not important.

[00:08:09]Doing all concepts is important. Doing more questions is not important. Doing all questions is important. Doing selective theory preparation is not important. Doing all theory preparation is important. All means all. We see I normally tell people that you prepare for everything. But still exam pressure the stress that stress and you are not able to do you go for selective preparation. That strategy is not going to work out. Looking at the two papers which I've seen last time paper was still manageable. This time paper had more challenges than that. So tougher paper can be tackled if you do all concepts in depth. If you had done all concepts in depth, today I will show you what 50 marks of the paper you could have handled well. 50 marks you could have handled well. 50 marks difficult to handle. Uh 50 to 60 could have been handled also. But difficulties there.

[00:09:02]There are no doubts in all that. There are no doubts in all that. And there's a possibility that ICI may give some grace marks and other things. That possibility does exist. But anyway, some students are going to clear even in the stuffer paper. But invariably every student struggled mo most of the faculty's material did not cover these type of questions. Concepts are covered.

[00:09:22]Concepts are covered even in my book.

[00:09:24]But still difficulties was of such a high level that because of the exam stress outside the exam easy for me to think and tell. But during the exam pressure it is very very difficult lengthy paper extremely tough all that is there. So my three main points don't try to go for more questions AI drafted questions complete whatever is given to you in depth in depth in depth. Don't do any selective preparation and theory prepare all 15 chapters. Theory prepare all 15 chapters.

[00:10:00]Maybe next attemp turns out to be an easier one. Turns out to be a tougher one. We don't know because why I'm not saying you to go for difficult or drafted is you don't have one subject.

[00:10:13]See if you have only one subject you do everything possible. I teach only one subject I can do anything in AFM because I learn only you today asked me to solve a basic direct tax question. I don't know basic direct tax question. I don't know how many indas are there. How many law sections are there? what are the laws which are there GST how it works I don't know I'm not in touch with all of them I can afford to learn AFM in depth because I do only one paper I can solve even more AI drafted questions more difficult questions everything I can do look at your end look at your end it is not possible guys it is not possible don't fall in the trap of this because people will say do this do this do this do this do this don't try to get classes just because you want to do difficult questions get classes. If you want to have conceptual depth then try to get even my students struggled. I'm not saying that my students enjoyed this uh paper. They were also struggling.

[00:11:16]Everyone struggled. There are no no doubts on that. Now I come to the uh every paper I have given a reference and uh this was the broader overview. We used to do a block methodology. My block methodology also not greatly worked here. Block one which is what is predominantly tested was tested only for 30 marks. Block one was tested only for 30 marks. Forex derivatives portfolio which is a deadly combination tested for 41 marks. Theory was tested for 24 marks. 24 marks. Theory got tested and then your allied area. So theory if you have not prepared well you could have struggled with the paper because theory generally we don't pay that much attention to theory and if you don't pay that much attention to theory you would have struggled automatically in the paper now let's go to one by one first question I will tell this question to be on the easier side it is an unseen question it is on the easier side of India issues a fiveyear year sovereign gold bond issue price is 5,000 per g investor purchase 200 g so as you read you understand 200 g he purchase so 200 into 5,000 10 lakh is the cost 200 into 5,000 10 lakh is the cost bond carries a coupon rate of 2 and 12% as simple interest on the initial investment on the initial investment means 10 lakh into 2.5% 25,000.

[00:13:00]At the end of IS bond will be redeemed at the prevailing market price of gold.

[00:13:06]prevailing market price of gold.

[00:13:08]Interest is taxable at the investor's slab rate. Whatever is the slab rate of the investor, the taxation will come.

[00:13:14]Any capital gain arising on redemption is taxable at 20% after considering the benefit of indexation. Benefit of indexation means you have to index the cost of acquisition. You used to be given some CI cost inflation index but here they've done something else.

[00:13:30]Inflation is the indexation rate.

[00:13:32]Inflation is 4% peranom. Inflation is 4% peranom. Investor purchases 200 30% tax bracket. What is the interest income after tax? after taxes 25,000 minus 30% 17500 first option is eliminated it could be either of the three then approximate real real post tax return real post tax return what is real post tax return I get a return of 2.5 post tax 1.75 this is called nominal return for real return. Approximate they have asked approximate means I used to tell in the class also approximate means you can do that is what is in the MCQ it will work approximate what you can do nominal rate is equal to real rate plus inflation where we learn in capital budgeting real rate plus inflation so nominal rate is 1.75 real rate I'm calculating inflation is 4% goes to the other side minus 2.25% 25%. Minus 2.25%.

[00:14:44]This is a basic question could be handled easily. After 5 years, gold price becomes 6,800 per gram. Inflation is constant at 4% annually. Inflation is constant at 4%. What is the indexed cost? Indexed cost means 10 lakh plus 4% five times. You have to do 4% five times in the calculator. 10 lakh plus 10 lakh plus 4% for the first year indexation second year indexation third year indexation fourth year indexation fifth year indexation you will have to index it I'm getting 1216 653 first one is eliminated second one is eliminated two choices are still there 1216 653 at what rate am I selling I'm selling at 6800 so 200 into 6800 is 13 lakh 60,000 this - 1216 - 1216 is the capital gain and they are saying if you redeem and you are in 30% tax bracket what is the net amount received after capital gain capital gain is 20% capital gain is 20% so 1360 minus 20% of 143 347 143 is the capital gain 143 33 347 20% 20% 1360 13 lakh 13,331 this ideally you should get full marks is my view okay this is a manageable question clear first question is over coming to the second question this is not an unseen question but I have been telling students that this is not a fully logical question but it is not an unseen question why it is not an unseen question I'll show you the question institute study material 9.46 46 I'm not going to give reference to my material.

[00:16:44]Okay, I want to give reference to institute study material only. So that you see in institute study material obviously if it's there in institute study material it'll be there in my material also. This is the question.

[00:16:53]Suppose MIS limited is considering installation of solar electricity generating plant. Plan shall cost 2.5 cr saving an electricity expense 21 lakh per year forever 12 lakh or 35 lakh.

[00:17:04]Assume WCC risk-free rate. Should you accept the project or not? This is the question. Okay. Your cost is 3.2 cr. You can have a saving of 25 lakh per year in perpetuity. In my material I used to give two answer logical answer ICI answer and I used to tell students to follow the ICI answer but yeah this is a challenge because in case you try to think on the logical way 3.2 cr 25 lakh per year in perpetuity there is an uncertaintity if you do high saving 15 lakh low saving 15 lakh high saving 40 lakh if you want to invest 3.2 2 cr today and 25 lakh in perpetuity WACC 9.5%.

[00:17:46]What is the NPV if you invest today and NPV later? First thing is 3.2CR is my outflow. Inflow is.25 divided by 9.5%.25 divided by 9.5%.

[00:18:06]3.2 2 I subtract I get.57 with this remove the two choices remove the two choices negative.57.57.57 second one if it increases if it increases to 40 lakh our NPV is 3.2 2 +4 divided by 9.5%.4 divided by 9.5%.

[00:18:41]3.2 I do I get 1.01 1.01 40 9.5% 3.2 yeah 1.01 story over I just put a tick here and story over with the first one then they are saying 3.2 2 cr 40 lakh are 15 lakh risk-free rate is 6.5 using risk neutral probability compute returns in both the scenario returns means what am I getting as returns what is return I invested that is let's take this number 1.01 on 3.2 I have not even done the other scenario 1.01 divided by 3.2 to 31.56%.

[00:19:26]These two choices are eliminated.

[00:19:28]31.56%, the other two choices, this is smart work. Okay, I've eliminated the other two choices. I'm not doing the low one.

[00:19:35]Low one has to be -50 only. We're not doing the low calculation. And probability they have given it in the next one. They have given the probability in the next one. They have given the probability in the next one.

[00:19:48]So smart work if you do you can put a tick here. Next one. They have given the probability also with the smart work. I put a tick on 69.5% and proceeded. We just put a tick on 69.5%. How probability is calculated? If you want the calculation is here this return P 1 minus P and you get the probability after this is done then they are saying if you wait for a year then savings will be 40 lakh 15 lakh WCC 9.5.

[00:20:20]a minute guys.

[00:20:23]Okay, sorry. So this one on 3.2 TR the savings will be this. We have already decided the NPV for these two scenarios 1 01 cr. I'm not even doing a lot of calculation. Other one is 1.62C crability for this was 69.5%.

[00:20:47]other one has to be 30.5%.

[00:20:51]There is a problem with this because whenever it is an option I used to tell in the class that 30.5 the value should be zero. You can't have a negative value. You can't have a negative value because if I wait for a year I can decide whether to invest or not. 40 lakh means I'll invest. 15 lakh means I'll not invest. So it should be zero. This is the problem I had with institute question. So 1.01 01 into 69.5%.

[00:21:18]70 lakh.

[00:21:20]This one 1.62 30.5%.

[00:21:26]49.41.

[00:21:27]Net amount is 70.19. You do you get 20.79 and divide this divide this by 20.79.

[00:21:42]I'll have to divide this with the WCC and risk rate. So all these options are automatically eliminated. Answer is this divide by the risk-free rate that is one plus the risk rate one year discounting one year discounting. This is a manageable question if you have done the IC study material properly. So 12 marks first 12 marks are manageable.

[00:22:02]Okay, this is difficult 100% if if you have not prepared the theory. If you have not prepared the theory from the ICI study material or from my material of this chapter chapter 14 that is page 14.12 14.12 this is the meaning what is poison pill you need to know what is green mail you need to green mail refers to an incentive offered by to the potential bidder management may offer the acquirer a higher price for it shares than the market price. Higher price for it shares than the market price. This is green mail question. This is green mail question. Substantial amount of convertible debentures. Substantial amount of convertible debentures. Uh the target company may issue substantial amount of convertible debentures to be converted on the future date when it faces a potential takeover threat.

[00:23:07]Poison pill. Unfortunately, no corner you need to know. That is the difficult part. I agree. Then you see the next one which is your uh the cow out the answer for the next one which is here. They're saying R limited is a parent company. In order to grow at a faster pace, it carries higher valuation to unlock and generate cash. A strategic avenue is to go through an IPO. Is to go through an IPO. A parent firm makes a subsidiary public through an IPO of share amounts to a partial sale of a new publicly listed companies created but the current keeps a controlling stake in the newly traded subsidiary. So these are called equity cowouts equity cowouts. So this you will be able to answer only if even my material I would have shortened the point. My metal does cover it but I've shortened the points. This I may feel it is challenging for the student to do if they have not read nuke and corner of ICI study mal which is difficult which is difficult. So by now some confidence should have come okay 18 marks could have been managed if we had done the study material fully. I'm not talking about my material at all study material.

[00:24:29]Okay next question. This again is a challenging very challenging question but not fully away from the institute study mater institute study mater I'll go to the page numbers I will go to the institute study mal page numbers I'm not even going to my material because when I go to my material it'll feel that I have covered I'm talking about something which is there in my material not there in IC study material consider a portfolio consisting of 2 cr investment in xyz 2 cr investment in ABC daily standard deviation 1% correlation coefficient 10day 99% value 10 day 2 cr in XY is 2 in ABC what institute I want to invest 25 lakh in alpha and beta in the ratio of 6040 so alpha 15 beta 10 weight is 6040 daily standard deviation is given correlation is given Mr. X wanted to measure V for confidence level 99% and 90% 99% and 90%. Zed score 99% confidence level 90% confidence level 99 and 902 they are asking what is the value at risk annual value at risk annual value at risk means first I need to know the portfolio standard deviation which is you will have to do sigma alpha w alpha squared sigma beta w beta square it is done here weight of alpha standard deviation of alpha square weight of beta standard deviation of beta square to weight of alpha weight of beta Standard deviation of alpha, standard deviation of a correlation of alpha beta. Once you do all of this, you get 95904%.

[00:26:09]Standard deviation you take it and then you follow the formula. Is it new here?

[00:26:13]No. You see the solution. Calculated variance of the portfolio.

[00:26:19]After the variance of the portfolio is calculated, calculate the standard deviation.

[00:26:25]80623%.

[00:26:27]Then the standard deviation in amount.

[00:26:28]And for 10 days square root of 10 we are doing square root of 252. Square root of 252. Now this question should be manageable. Second 100% difficult. I'm not even going to uh this this is difficult.

[00:26:43]Difficult not covered in my material. I have maybe in one batch I have discussed that something like this can come but not not there in my material. So let's not call that is there in the material. What is the diversification benefit? What is diversification benefit? Is the reduction in the standard deviation due to diversification. What is reduction?

[00:27:06]Somebody did 15 lakh investment standalone. Somebody did 10 lakh investment standalone. You will calculate the V for 15 separately, 10 separately. Add them and compare that with the V of 95. Standalone V 15 lakh 10 lakh daily standard deviation 90% multiple and you get 2340 11520 2340 and 11520 together you are getting 31338 this is at 90day confidence level and diversification benefit is 3252 the difference between the two sum of individual V minus the portfolio value at risk minus the portfolio value at risk then comes the last question where this increases this also I would not say is difficult okay your correlation increases correlation increases from 6 to80 6 to80 if this correlation increases substitute8 here automatically variance will go up standard deviation will go up value at risk will go up value at risk will go up 1.3 value at risk increases to 950 53 increases 48,47 rounded off to 48,85 clear this two questions manageable one question is very difficult okay so till now I feel eight MCQ questions are manageable four are difficult the theory is also difficult case scenario five is also challenging very challenging I felt this to be an extremely challenging question concept is there in the institute study m but it is a challenging question it is a challenging question I'll quickly discuss the Sir, they are saying Green Aggro Limited enters into a 3-month forward contract on January 1. This is the entry date.

[00:28:55]Execution will happen on April 1. I entered on Jan 1. On March 1, what is the maturity settlement? Maturity settlement means if you wait and settle it. If you wait and settle it, we have entered into a forward contract. We have entered into a forward contract. Green entered into a 3-month forward contract on January 1, 2026 to buy to buy USD 2 lakh import payment.

[00:29:25]I have to buy so buying will happen at the name is exports limited but they are buying they are buying. So 2 lakh into 84 this is eliminated only one choice is eliminated. Now instead of paying 84 I do some smart thing smarter stupidity I cancel the contract and rebook a new contract on this date. If you have done a contract at 84, cancellation will happen at a one month forward rate. 1 month we have entry date execution date format but I'm quickly discussing. So I will cancel it 83 7 I'll cancel it 83.7.

[00:30:11]Cancel it 83. Just give me 84 was the original contract. Yeah, we cancel it at 83.7 and then we go ahead and do a rebook.

[00:30:26]Rebook a 1 month forward contract. Reook a one month forward contract. The one month forward contract is at there's something there is some just a minute guys.

[00:30:56]Okay, I think my answer is wrong here.

[00:30:59]So I that I got a little confused. So I cancel this contract and if I take a new contract it'll be at 84.1.

[00:31:07]I don't in my answer I've said a new contract is at 84.05.

[00:31:11]Not sure what I have ended up doing that. So this new contract is at 84.1 because we are taking a one month forward contract. One month forward contract is 84.1. I don't know I saw this by mistake something has happened.

[00:31:24]84.1.

[00:31:26]If we are taking this if we are taking this contract indirectly what will happen is my extra cost is 60,000 this if I add this if I add 84.1 if I consider 84.1 it will become 84.1 into 2 lakh 1 cr 68 lakh 80,000 I don't see an option of extra 80,000 so maybe IC takes extra 60,000 takes extra 60,000 something seems to I have done some typing mistake I don't know I don't have the entire question but I have typed it so something could be wrong here next import obligation is settled early on March 1 if you settle early on March 1 you will cancel will happen at 83.7 and settlement will happen at 83.75 settlement will happen at 83.75 spot ask settlement will happen at 83 3.75 in that scenario overall payment cancel at 83.7 new at 83.75 it'll become 16810 168 10 MTm loss again too many things they have asked uh so they have asked for MTM loss on different dates they're asking on the MTM loss on Feb 1 Feb 1 is on Feb one if you cancel the contract on Feb 1 if we cancel the contract what is going to be the loss I think some error has happened in the table uh the the rates just give me a minute I'll see the rates and maybe because of which only that some issue there in the copying the rates I've done some error I think let me see the rates now yeah it was 84.05 05 only. So the answer is right guys. This I think my typing errors are there in the question. It is 8405 only. Then whatever answer is there that is right. Okay. Whatever answer because I just got little confused when I was reading this 84.05. This also I think goes to the next two columns. So some typing errors are there in the question.

[00:33:44]You can look at your institute study m question. Answer is right. Answer is right. No. What we are calculating is what is the loss on each of the dates?

[00:33:52]What is the loss on each of the dates?

[00:33:55]How do I calculate the loss? I will show it with the institute exam paper itself.

[00:34:00]84 contract entered cancelled cancelled.

[00:34:05]If you cancel in February, you'll cancel at the bit rate 84 83.95.

[00:34:12]You will have a loss of you will have a loss of 10,000. Moment there's a loss of 10,000.

[00:34:19]This option is eliminated. This option is eliminated. Two options got eliminated because of this. February there is a loss. February there is a loss. March let us complete it. April let's not do it. Why should I do April?

[00:34:32]Because March I'm done. I'll get to the answer. March cancellation with this one month forward rate. March cancellation 60,000 loss. So smartly if you do you need not do the April calculation. March cancellation and the answer is done. My printed answers are right. There is some rate I have done some error. Okay, so don't worry about it. This question I feel is on the trickier side. Students would have struggled with the question. Concept clarity is there. Maybe you could have handled a little bit but it is a difficult. So there are no doubts on that. So out of the 30 marks MCQ maybe around first three questions I feel you should score marks. Next three you should score marks. If you have done that question from the institute study material scenario three is very difficult. If you have not done that part scenario four two questions are manageable eight and some of this may become manageable. Some of this not everything. Okay. Some of this may become manageable. Major chunk of it may not be manageable. Major chunk of it may not be manageable. Some typing errors are happened in the options and all. That's okay. Let's not worry about it. So this is as far as MCQ you could handle around eight questions properly.

[00:35:50]Seven your luck factor may play out and maybe you score 10 out of 15 if decent level of institute study material preparation is there or any good concept book is prepared. Okay. Now comes the descriptive question. First question newly drafted covers currency swap international capital budgeting different different thing they have asked and because of which it could be a very challenging question for students I'll read it initial capital required for the project is 4,000 million valor valor is some currency under the agreement B will sell the project back to the government after 4 years for a guaranteed sale price of 8,000 during 4year operational period will provide something and there's a currency swap.

[00:36:38]I'll show you that currency swap adjustment from the institute study material. From the institute study material, I want to show you everything.

[00:36:45]Institute study material. If I go to 10.74, 10.74 page 10.74 page.

[00:37:07]This is the question. Uh the project will require an initial investment of 500 cr. The oil field along with the equipment will be sold to Indian government for 740 cr. Since the Indian government will pay for the amount in Indian rupee, company is worried. Assume the Indian government offers a swap at a spot rate which is $1 equal to 50 in one year. Then should the company should offer this conversion or should it do just nothing? Okay, this was the question from the institute study material. Now here I want to invest $4,000 million.

[00:37:32]uh I'll be selling to the government same government only $8,000 million there'll be some technical assistance I get 80 million to hedge the currency risk B will swap the principle to Indian rupees at today's part rate it'll be reversed re-exchanging at the same rate reverse on the last day bank will charge some facilitation fee this is calculated on the rupee amount on the rupee amount so it will be directly in the rupee currency swap covers only the initial amount and terminal principle Hedge all using the forward rate. Now rates have been given. My initial outflow is 8,000 sorry 4,000 divided by 50. 4,000 divid by 50. 50 is the exchange rate on day 0 divided by 50. Okay. Every year I'll be getting 80 million. This 80 million I'll convert at the rate of 53 56 59 63. 80 million I'll convert at the rate of 53 56 59 and 63.

[00:38:31]This is my inflow. I'll be getting 80 million. I have to pay.3%.3% of 80 million. 3% of 80 million.3% of in Indian rupee whatever is the amount. So this is my maintenance income. This is my facilitation fee and this is my net income. On the last day we get back 8,000. we get back 8,000 in that 4,000 will be at 50 only that is re-exchange and balance balance will be at whatever is the forward rate have we done this type of question in that currency swap question yes the currency swap question has this adjustment of the last day of the last day but there are a lot of other things also NPV positive go ahead with the project NPV positive go ahead with the project go ahead with the project this is question number one a difficult very challenging uh very very challenging let's let's not get into much about it now question 1b B came from H model came from H model now is it there in institute study material answer is yes do students prepare for this answer is no did my students prepare for this answer is yes did my students answer this in exam answer is no so it is because to it is covered in our material. Many of my students could not handle it in exam pressure situation because this has never been tested. So the mindset is why should I prepare for this? There is a similar question in my material. Institute study material has the concept not question. Concept is there. Question is not there. Question is not there. I also have a question but still I know my students have not been able to manage this properly. They have not been able to manage this question properly. I'll show you the institute study material. Again my job is just to show you institute study material and make institute study material now more like a bhagawat gita for you for your AFM. Don't focus only on the faculty material. We are doing a good job but institute is institute. This is the formula for H model. d 0 into 1 + gn r - gn d 0 h1 gc - gn r - gn r - gn. This is the formula given in the institute study material. None of the uh books have texted s none of the uh institute study material questions have come in the past on this. Is it covered in our material? This is the only question where I want to show my material. I've not been showing my material till now because I felt everything is covered in the institute study m this is just fortunate. Okay.

[00:41:21]Fortunately I've covered one example on this. It's just fortunate.

[00:41:25]Maybe sometimes it possible that I don't even cover a a concept itself. It is possible that faculties in order to simplify things we sometimes miss out on this.

[00:41:37]This is an example and with this example you get an answer. Coming to the question which is there more or less this was there in the question also. For example, D0 I want in that formula. D 0 is 40. It recently paid a dividend of 40. So I take 40 into 1 + gn. Gn is normal growth rate.

[00:42:00]Normal growth rate. Gn is normal growth rate. If you see here they have set 1 + gn 15% growth rate will decline transition period current data terminal data terminal data is terminal growth rate ro into retention 12 into 15 6%. 6% is the normal growth rate as of now the growth rate is 15% it will become 6%. It will become 6%. So I apply I apply this here 1 + 0.06 06 K may be given in the question K is the cost of equity which we are using transition period ROE terminal data required return required return is 13% I follow 13% here minus 6% plus the same D0 we take half of transition period into the higher growth minus the normal growth divided by 13 - 6 Now if if at all you have done H model instute study material instute study material you could have managed this difficult I'm not going to say diff easy and all 734 how much is the deviation this question I feel is a manageable question the previous one is very difficult the previous one is very difficult this one is a manageable problem okay question 1 C concepts on sustainable growth rate but could be challenging for students Unless unless you have clarity on what is exactly sustainable growth rate. So I show from institute study material first. What is sustainable growth rate?

[00:43:42]Covered in my material covered in most of the teachers material. What is sustainable growth rate? Let us see that wording first. Once we read the wording of the AAI, we will be in a position to handle the question. This paper if it was an open book exam I would have been very happy because then I can open institute study material sustainable growth rate concert by Robert C. Higgins can be achieved given the firm's profitability asset utilization desired payout ratio sustainable growth rate is a measure of how much money how much a firm can grow without borrowing more money without borrowing more money without borrowing more money now they are saying our sustainable growth rate is 10% I can grow 10% without borrowing more money but I want to grow at 16%. If you grow at 16%, you need more money. If you need more money, you'll have to borrow. But borrowing is not possible because debt to equity ratio is already at the maximum limit. So I can't borrow money. If you want to borrow money, then you can achieve 16%. But borrowing is not allowed because we are at the maximum permissible limit. We are at the maximum. The company's already at its maximum permissible limit. I can't take any extra loan. sustainable growth rate without any fresh equity, without any uh fresh debt. If you take fresh equity, fresh debt can also come. Inflationary pressure. As inflation increases, your value of assets will increase and you will have more requirements for because value of assets increases, balance sheet value increases, you need to raise money. What are the alternative courses of action for that? First I gave what is the formula of sustainable growth rate because this is critical. With this you can either go for extra equity infusion is improving equity multiplier or improvement in profit margin or the retention ratio or the asset turnover.

[00:45:26]Any of them you improve you will be in a position to manage this. Any of them you improve you'll be in a position to manage the story. This is question 1 C theory question again depth depth clarity is needed not more reading depth of clarity is needed as to what is sustainable growth rate question 2 a this is there exactly in institute study material I'll keep going back to study material there in my book also I'll go back to institute study material Chapter six question number 15.

[00:46:11]See why I am giving references of the institute study material is to tell you how ICI has prepared the paper. Nowhere I am trying to say the paper is on the easier side. So please your students then will say no no everything was from institute study m not everything there are lot of things which are different different things but yes good part if if this is the data factor one sensitivity factor 2 sensitivity 86 1.5 1.2 Two, what is the sensitivity of the two factors? All this is given.

[00:46:44]Same thing two securities according to this beta factor 1 factor 2 expected return risk-free whether they are correctly priced or not. How will you calculate return under AP is RF plus factor 1 beta into RP of factor 1 factor 2 beta into RP of factor 2. So you take 6 + 1.2 2 into 4 +.5 into 5 1.2 into 4 and.5 into 5 you do the calculation 13.3 16.2 to 14 16 we are required return is lesser actual is more that is a good security by undervalued other one is overvalued then they are saying I want to create a portfolio I want to create a portfolio where I'm going to take a long position and short position what institute done in study met that I'm going to invest 1 lakh and sell short 50,000 answer is 1 lakh and 50,000 only the same question only they ask what is the sensitivity here they've given a target sensitivity I write my target sensitivity here weight factor one product factor two product target sensitivity is there form two equation solve them you get the weights is 150 and -50 and -50 I feel I feel this question can be managed by students this question can be managed by students question not there not there in institute study material concept itself is not there they have not used the term ATM ITM and all in the institute study material easy to No, but still not covered means not covered. I can't say that this is covered in the institute study material.

[00:48:26]Now here they are asking for Alps company shares traded 2,000. They have given type, strike premium, contract size, assess whether it's ITM, ATM, OTM, intrinsic value and time value component. Again one more question I have to go back to my material because then only you'll be able to appreciate some of my discussion.

[00:48:52]This is uh not a very tough question but uh students who have not understood what is ITM ATM because institute study mal doesn't cover it that is one challenge second challenge you see this question state whether each of the following is in the money at the money or out of the money this is what is tested and consider the data calculate the intrinsic value and time value calculate the intrinsic value and time value exactly same thing they have asked in the exam the same thing they have ended up asking intrinsic value and time value and in the money, at the money, out the money uh calculation. Going back to the question, the requirements are whether it's in the money, at the money, out the money, all option will get exercised if the actual price is higher than the current market.

[00:49:41]If the actual price is higher than the strike price. So this is in the money.

[00:49:44]Both are equal at the money. This is out the money. Put this is out the money at the money in the money. Intrinsic value will be zero for at the money and out the money. Others intrinsic value is difference. 80 80 time value is the gap 130 minus 80 50 85 45 95 75. This is one. Then they're saying price may increase by 150 or decrease by 150. For everything they're saying whether it will be exercised or not. How many calculation they want for four marks? That's my problem with this question. So then increases to 2150 whether it will be exercised or not you answer gross payoff you calculate net profit you calculate and profit or loss then price decreases again same calculation not not a very uh easy question for four marks concept is not there in institute study material it is not there in the institute study material okay let's move ahead okay this is a theory question I feel this is a very scoring question okay in early stage startup valuation is on DCF.

[00:50:48]How will you do DCF method? Startups don't make any profits. When profits are not there, DCF method can't work. So, no, can't be used. Use staged funding.

[00:50:58]Yes, there is stage funding. First stage, second stage, seed, stage, preceded, a lot of stages are there.

[00:51:03]Yes, this is right. Bootstrapping reduces dilution. Dilution means I don't dilute my equity. True. Bootstrapping means managing with my own funds. But it'll limit growth. It will limit growth. Angel investors generally invest at a later stage. No, they invest at an earlier stage. They invest at the earlier stage. Seed stage. Seed stage.

[00:51:19]So this is a scoring format theory question.

[00:51:24]Question 3 A. My god this question when I discuss the answer you'll feel was it that easy? But in exam not possible for you to manage. Very very difficult very very difficult to manage in exam. That is why I said depth of concepts rather than more questions. Depth of concepts rather than more question. Understand this. Now I'm going to do a two-year project.

[00:51:47]Not covered in my material, not covered anywhere. So that's okay. Initial investment 40 lakh after tax life unlevered spot rate corporate tax rate.

[00:51:57]Borrowing currency these are my interest rate. Okay. And and and the risk-free rate the riskree rate somewhere we'll have to see interest rate in USA 3%.

[00:52:10]Interest rate in Europe 5% peranom I assume in India is 9%. So these I'm assuming it to be the risk-free rate.

[00:52:18]I'm assuming it to be the risk-free rate because IRP wants that risk-free rate.

[00:52:23]So whether you borrow at 3% in US which is the risk-free rate, 5% in Europe which is again the risk-free rate, 9% India which is also the risk rate. All three are same. All the three are same because all are risk-free rate.

[00:52:37]Understanding is all are risk-f free rates because I don't have any other option. Three and five. Three and five.

[00:52:42]Even if you dopp and calculate because some students will try to do IRP calculate future rate and then do in the end everything will be same outflow everything will be same out which is the cheapest all three are cheapest all three are cheapest or all three are equal which one will I still do I want money in euros please go for euro borrowing there's another indication also APV approach wants you to discount the tax benefit at a pre-ax cost of debt the pre-ax cost is 5% here that 5% matches the euro point that 5% matches the euro point. So smartness you manage with that also 5% is for Europe one the table tells you that some some hidden story APB what you do outflow 40 lakh inflow 25 lakh discounted at 12% get the answer in euro ultimately I'll convert into get the answer in euro 40 lakh and 25 lakh that is called base case NPV tax benefit is APV approach says whatever loan we are taking 40 lakh into 50% into the interest I pay into the interest I pay on that interest I assume India's tax rate tax benefit and discount that tax benefit at pre-ax cost of debt all these are in euros convert them into INR in the end convert them into INR first one if you had an understanding of how IRP works may be managed otherwise very challenging Let's let's not debate on this question. It is a very very challenging question. Paper had lot of challenging questions. So that's the problem. The problem is there were many challenging question. 50 marks I can still feel manageable. Okay. In MCQ around 20 marks can be managed in descriptive. Now this four mark can be managed. Critical one uh not this and this six mark can be managed.

[00:54:35]Marks is intact in the first question. H model could have been managed if you had known an H model otherwise that first entire question is out. Entire first question is out 10 marks manageable here in the second question. Okay, this one is difficult.

[00:54:51]This one is available in inute study m but four marks again problem is four marks. I'll show you the question TYK question number two and question number 10 of the question M so of the institute study material in so question number 10 of the my material and institute study material it is covered in question number 17 and question number uh question number 17 and question number two I'll show you the question let's go to the mutual funds question mutual funds question mutual funds question.

[00:55:26]One is your entry load and exit load which is tested concept in this question. And the second part they tested is uh this one question number yeah dividend plan and bonus plan where we are investing two lakh everything lot of investments happen only one investment in our exam question only 1k I'm investing 12 lakh 720 in the first one 480 in the second one NAV is 48 on the NAV you'll have to pay the entry load so divide by 48.96 entry load is 2%.

[00:56:06]Then you get your opening units then dividend plan units dividend reinvestment new units total units these units you sell at the closing NAV pay exit load pay the cost of acquisition return is 19.9%. This is manageable question. Four marks is a disaster. This should have been a six mark question.

[00:56:25]Then bonus plan 9803.

[00:56:29]You get the units. Bonus plan gives higher return. Bonus plan gives higher return. This could have been managed or maybe this entire question you could leave it in choice also. The entire question could be left in choice provided you were able to take other questions. Okay. A lot of questions are challenged. Question 3C not a direct theory question but you need to know what are the benefits of originator and problems of securitization again this is covered in the interview study metric I am telling you why this is because I want to give you some comfort that yes if I go with depth depth I'll may be able to handle paper to some extent I'm nowhere saying this paper can be still handled to a greater extent you can't manage it but some extent angle of originator there are some benefit Benefits of balance sheet financing helps to improve financial ratio reduced to borrowing cost and this is the same thing cleaning balance sheet it cleans the balance sheet improves the ratio liquidity generation these points are there helps to improve financial ratio reduced borrowing of balance sheet financing regulatory challenges because it's NPA and valuation because NPA means there will be certain complaints needed provisioning could be there transferring the asset to us could be difficult and valuation is also difficult uh theory the balance sheet cleaning part is easy other part is little difficult if you want you could have left this in choice question 4 a cutff point already tested again tested in exam so now if we say that this is difficult I have a problem with uh us friends rather than ICI in this question okay because cutff point is something which we have already seen and good is they've given the cutff point concept only one says is calculate the trainer ratio. Calculate the train or ratio. This some of my students should have handled this little better.

[00:58:22]Uh the return minus the risk-free rate divided by beta. Calculate this wherever you are above 7.95. Accept accept reject reject. For this you have to calculate proportion. Proportion means you need to know remember the formula. I understand remembering the formula could be little difficult for cutff point I try to simplify in my latest batch but they have asked also weights weights this is the formula beta by sigma squ ci r minus the maximum cutff point get this and in this proportion you'll have to put the weights in this proportion third one is easy for capm get the expect so first one easy what security this one easy cut off point also you don't do it's okay expected return and valuation of easy expected is rf plus beta into RM minus R for those two securities only and it means the returns are on the higher side undervalued please buy it sharpace index model compared with CAPM assumption theoretical difficult difficult difficult but they are consistent here consistent means sharp model said these two security and your CAPM is also saying both are good so somewhere some theoretical points but difficult difficult okay uh two questions easy two questions difficult maybe those two questions carry 3 marks in exam. Then came question 4B. Uh closed ended fund concept I've explained to my students.

[00:59:47]Closed ended fund means you cannot buy at the Navy. You'll have to pay NAV plus or minus premium. Find the average return based on geometric mean who bought,000 shares of the closed ended fund at the invitation sold at the end.

[00:59:59]So you purchased for 20 sold for 22.3 plus 4%. In between we don't get any dividend anything. Okay. Geometric mean unfortunately this is CA interstudy material CA interstudy material we'll calculate and calculate the geometric mean geometric mean is calculated like this are basically time value of money in between returns are of no use here okay in between returns are of no use geometric money geometric mean calculation if every year you calculate returns then you can do geometric mean like this here in between returns are of no use so directly what I can do is 20 present value is equal to future value divided by 1 + r power n that r is the geometric mean here. So 20 23.192 divided by 1 + r^ 4 r is the geometric mean for n they want geometric mean then do 20 with 22.3 20 with 22.3 we are earning more we are earning more reason is we got extra 4% on the closure so we are earning 3.77 NAV is only 2.76 we are earning more because of that extra 4% which we got extra 4% for a 4year period third question. Yes, that is not a difficult one. Part of the uh part of the important chapters should be able to manage. So in this question, this four marks you should manage this. I have my own set of doubts. Maybe you couldn't do it. Maybe three marks here. So seven marks, 20 marks of MCQ.

[01:01:38]First question, 10 marks. First question, 10 marks. Second question, second question. Let's see how many marks is possible for us to manage in an exam stress scenario. Second question the sorry the 10 marks is from 2B 10 marks from 2 A to B. First question nothing is possible. It's on the very difficult side then I proceed forward.

[01:02:06]This is done.

[01:02:09]Then we move to question 4 C. Uh an alternate question very very difficult. I got really uh surprised to see such a question. 100 crore floating loan reset annually caller strategy in a caller strategy where you buy a cap sell a floor cap rate is 9.5 identify that will make the caller a zero cost zero caller means present value of floor outflow is equal to present value of cap inflow present value because they've given discount factor cap will get exercised only at this stage so cap is 100 cr into 1.1%.

[01:02:51]into 84.

[01:02:54]This should match here. This should match here. This should match here. If you see the flow rate theoretically will come in between 8.6 and 9.2 that in exam stress is difficult for you to know. How will it come between 8.6 and 9.2 because see if it exceeds 9.2 all the three will have outflow that will not match this number. All the three outflow together will not match that number. There will not be any outflow in this. It will be zero. These two alone will have outflow.

[01:03:23]These two alone will have outflow. We assume that as f do the calculation, we get 8.683. If you assume all the three have outflow and do the calculation, you'll not get above 9.2. You'll still get a number below 9.2 which is wrong.

[01:03:36]Then which becomes wrong. Question 5 a FC based valuation. uh it had a reverse working element question and as well the normal FCF valuation first part easy second part very difficult let us see this now uh value 425 currently trades at 240 two-stage FCF net income is PAT net income will grow by 25% so 180 plus 25% and again plus 25% this is projected to be 240 net investment in operating asset. Net investment in operating asset means fixed assets plus current assets minus current liability. This 240 they are saying uh something is mentioned 30% will come from debt 70% will come from equity. So 70% equity part alone you subtract it 70% this is called FCFE cost of equity discount this part one is possible present value for the high growth phase present value for the high growth phase is possible second one is little challenging they have done 240 reverse working what is reverse working the value of the company is 240 into 60 14400 in this 14400 the high growth has given 118 the balance is going to come from infinity valuation. This is 14 to 81.

[01:05:05]Reverse work here you get 17 918.64 and this 17 918.64 is equal to FC FE2 into 1 + G divided by K minus G. This is perpetual valuation reverse working. FCF 2 into 1 + G divided by K minus G. What is FCFE? Uh the FCF2 into 1 plus G is FCF3. Technically it's FCF3 because FCF3 is different here. FCF3 calculation is presented here. Last year PAT add the growth rate. I don't know the growth rate. Less equity needed for net capex and working capital. They have said I need 20% of PAT is the investment in that 20% 70% from equity and FC FE is this 241.875 plus 241.875 G 241.875 plus 248 241.875 875g once you do this you'll get 10.5 and very difficult to handle an exam stress first part could have been managed second part is difficult question 5b okay zenith commercial alco is evaluating the repricing risk for the 90 days bucket following quarterly data is available rate sensitive asset rate sensitive liability quarterly net interest income banks earnings at risk limit is 8% hedging is mandatory. Identify the gap position evaluate. Now if at all a student had read this from the institute study material or even from my material a gap or mismatch risk arises from holding asset and liability and offbalance sheet item with different principle amount, maturity date or repricing date thereby creating exposure to unexpected changes. Positive gap indicates banks have more sensitive asset than sensitive liability. They are asking what is the gap question positive or negative? Liability is more asset is less negative.

[01:07:21]Then second if interest rate go up I will lose 5% on this. Very simple on the liability I have to pay extra 5%. This is thinking but very difficult 5%. This is also 0.5%.

[01:07:36]This is my extra expense.

[01:07:40]Other one is extra income. Expense will be on the higher side. So this will ultimately have a loss for me. Loss of 16.5 CR. Extra income extra expense.

[01:07:52]Repo rate goes down. Lower income lower expense. Lower income and lower expense profit will go up. And this number as a percentage of net interest income should not exceed 8%. Should not exceed 8%. It is not exceeding. So we are not reaching that E limit. Some ER limit they have said earnings at risk limit. We are not breaching that limit. We are not breaching the ER limit. We are not reaching the E limit. Now in the question is it covered in the institute study material? Yes. Is it possible for you to handle an exam? I I don't think so. Not easy. Some part you could manage but very very difficult. Let us see what ICI did in the institute material. Gap exposure. A gap or mismatch arises from holding a certain liability and the off balance sheet item with different principle. Positive gap indicates more interest rate sensitive asset interest rate sensitive liability. Negative gap indicates more RSL. The gap is measured positive or negative gap multiplied by the interest rate change the earnings at risk. ER method facility to estimate how much of the earnings might be impacted.

[01:09:04]The changes in interest rate could be estimated on the bas of past trend forecasting. Bank should fix E which could be based on last or current year's income and a trigger point should adapt on that calculation should be augmented by information. Now people may say that I practice more question I can manage it. Maybe next exam they ask basis risk question or they ask embedded option risk question are they ask reinvestment risk question you read everything understand depth of it practicing all type of question is very difficult could have been managed but it is a theory from the non-core areas transaction exposure and translation transaction exposure is underlying exposure of any export or import this is exchange rate on outstanding if you have any data or citor this is a real loss loss for me. Translation is accounting exposure. This line is there in my theory material. And with this we say transaction exposure is more critical because that is a real loss. Translation is just transferring the value from one book uh that is translating the value from one book to the other book. It is just translation. It is a book based adjustment rather than real adjustment.

[01:10:11]Question 6 A. One and two are general.

[01:10:14]Three and four are very challenging.

[01:10:16]I'll read it. Aerotech Industries Limited listed engineering major evaluating the acquisition of Meden Labs Private Limited Unlisted Pharma Laboratory uh data is given below 6,000 CR 450 CR merged I'll have a merged column number of equity share P multiple market price or standalone fair value post merger P is 6850 6,000 + 450 is 645 50. This is 6850. Difference of 400.

[01:10:50]Difference of 400 is basically the synergy gain at a PAT level. Synergy gain at a PAT level. At a valuation level, the synergy gain is 34,000 CR.

[01:11:02]All this I'll read in some time. First one and second one is manageable. Third, fourth is very difficult. What is first and second one? 6,450 put together 6850 extra 400 is part one answer extra 400 pat basis you divide by the number of equity share get the EPS P multiple is there for this valuation is 1 lak 80 combined entity they gave 34 combined entity valuation from the combined entity value of merge form is a plus m plus valuation gain a plus m plus valuation gain m is balancing figure 18900 reverse work 3780 reverse work P multiple so the P multiple comes through reverse working P multiple 400 crores reverse working standalone P multiple of medin lens industry P multiple and fair value per share this first and second can be managed first and second can be managed difficult in exam stress third one they are saying if you are going for three offers one is cash cash means I pay 4,000 second is I pay 1,000 plus aerotch sh I'm paying premium of 21.69% over standalone fair value. What the standalone fair value of med 3780.

[01:12:20]So I am paying 3780 plus 21 69%. I'm paying 21.69%.

[01:12:33]which is 4,600 in that 4,600 1,000 is cash 3,600 is shares 3,600 divide by 360 my company price 10 shares I lot 10 shares I all lot rank all the three offer if the price has touch 330 if the price has touch 330 cash remains 4,000 this will be 1,000 plus 10 into 330 10 into 330 bond you have to do a valuation of a convertible bond valuation they have not given interest rate in the questions.

[01:13:03]I've assumed no coupon. I've assumed no coupon. I value the bond. Valuation of the bond is like this. No coupon. Fair value per bond and add that fair value and get the answer. Challenging. First part can be managed. Second part is difficult. Then came black sh's model. I have I want to apologize to my students in some way. I have messed up in my material also here. When I say I have messed up, what did I do for black should model? It just covered everything is covered. Only thing is I could have maybe tried covering it little bit more.

[01:13:39]What is little bit more here? See black sh is covered in our material covered generally not a preferred area.

[01:13:50]We have covered we have said n of d1 n of d2 formula everything is explained.

[01:13:55]What is n of d1? What is n of d2? not explained in depth here at least n of d1 I've explained later that n of d1 is delta delta means hedge theta hedge ratio but the question question in exam asked for something like this price is given this is given all this is given value of d1 is given hedge ratio probability that the price on expiration will be higher this is technically called n of d1 this is called n of D2 this I did not write in my material but they in institute study material they in institute study mater so when as we faculties try to simplify sometimes miss out some points which keeps happening all you want to prepare extra or your the only material which you should refer is initute study material word by word you have to read you see the institute study material they have clearly given what is n of d1 what is n of d2 We as faculties or I as a faculty blame for this I have to take the name for this part because I did not write what is n of D2 I never thought that they'll end up testing what is N of D2 what is N of D2 I'll show you the institute material give me a minute the above formula probability that price on expiration will be higher than the exercise price higher than the exercise price So n of d1 and n of d2 is calculated. They ask for 5375 is given.

[01:15:30]So this is 0.5 3.54.

[01:15:35]Do interpolation between these two values. You'll get 5375. This interpolation part and all I have done interpolation part is there in my material but what is not there is what is n of d1 what is n of d2.

[01:15:47]The blame I'm taking is because I did not write I somewhere in order to save some space or some concept shot has happened there. I'll now obviously correct my material but IC something else in the next attempt. No. So uh so see here we used to do all this interpolation n of d1 interpolation n of d2 all this we have taken from the zed table. All this I have explained in my material. What I did not explain is what is n of d1 what is n of d2 n of d1 at least explain you do this then this then this then you do call valuation put is using pcpt put is using pcpt or this call and put at least my students should be able to handle because we have spent time on black shs this part what is n of d1 n of d2 the terms may be not clear to you so that you could lose now just to finalize the paper this paper is difficult there are no doubts in that so paper is tough future paper may be tough don't go for difficult question more preparation AI drafted question all don't get into that strategy no selective preparation theory can become a game changer paper will have certain easier question certain tougher question please don't follow anybody who says prepare for difficult question prepare for difficult question prepare you can't prepare one thing I am going to try and help you out is I'm going to try to give some MCQ kind of quiz in my telegram group where maybe I test the core concepts from the ICI study material, draft it in some form and then give it to you. Maybe that helps. Not the standard MCQ question.

[01:17:28]I'm not going to get into it. Okay. U this is my overall comment on the paper.

[01:17:33]I will say MCQ around 1820 you can handle descriptive maybe around 35 marks you can handle or 40 marks you can handle. 30 to 40 marks put together 50 to 60 marks handle possible balance some here there some here there you can manage and theory you should score marks theory you should score marks so my advice remains same don't people and confuse yourself follow whatever you have done and please trust trust whoever faculty you have learned from please trust him and continue with them Don't change just like that and also focus on institute study material in depth. In-depth means you have to read it multiple times now because anything can get tested. Don't try to do more question. Go to the depth of whatever is available as of now. Go to AI, type a parah there and tell AI that can you give me some MCQ questions from this par which tests my conceptual understanding. Maybe that and all helps you with this. I end the video. Any support, any assistance you need, please do send a message to me. Thank you friends. You have been a warrior by attending this paper. Let us see ICI gives some grace marks and we clear it.

[01:18:54]Thank you B.