Exam High Time!

I must apologize in advance, since I will not be able to write much for the next two weeks. Although I have only two exams this semester, one has 300 pages of in-class notes and the other is extremely tricky Corporate Finance. I don’t think that I will have much free time until it’s over. Even then, I will have one day shy of one month to study for the actuarial exam on May 26th, so no partying for me either.

On the bright note, I will start my summer internship after the school exams are over, at least on the part-time basis. Even though the job specifications mentioned part-time, I believe that after my actuarial exam I will be putting in way more hours than that.


Another issue have been researching lately is the Canadian Securities Course offered by the Canadian Securities Institute. I know very little about it, the only thing that really intrigues me is that the company is willing to pay for it, if I decide to take the two two-hour exams in the summer. I will post about the course later. Also, if someone took it and/or knows anything about the course and its benefits, could you please comment on that? I am interested in how long it takes to study for it, the level of difficulty for the person studying economics and finance and what can you do with just that course.


See you all soon.

"Ban the deed, not the breed."

As some of you might have heard, pit bulls are banned in Ontario, Canada. I am sure some of the states in US have the same law. Yes, pit bulls can be quite vicious and I partially agree with the ban. However I think that it is the owner of a vicious pit bull who should be "banned", i.e. heavily fined in case of an accident. This would not prevent the accidents from happening, but put a heavy liability on the owner in case they do happen, which would discourage people from having pit bulls or encourage them to have "leash all the time" policy with their dogs.

Another incentive for them would be denial of insurance coverage by PC/Life insurance carriers. This article is a clear example of this. Apparently Dobermans are deemed dangeous dogs as well, something that I did not know.

This practice of insurance companies is quite understandable. It is in fact risk they are trying to minimize and one in 10 (a number pulled out of a hat) doberman/pit bull owners are "risky policyholders". This is known as breed profiling and in my view is similar to racism. Next thing you know I will have higher life insurance premiums because I am Russian and all Russians are drunks.

While actuaries are doing their job, pooling the risky people together and trying to minimize the cumulative risk of the "portfolio", sometimes they refuse to "think outside the box". They rely heavily on mortality tables, contingency databases and other "hard" data, that they sometimes oversee the real-life facts. The 70 year old grandmother, who you denied insurance, has had dobermans for her whole life, she also runs the "underground" Doberman Training Facility in her basement for the dobermans of her friends. Her dogs are highly trained and completely peaceful. Shouldn't this be taken into consideration???

ING Direct + a Nifty Idea!

In the light of recent infatuation with ING Direct Saving Account, which is thoroughly discussed here, I decided to give it a shot. I applied on www.ingdirect.ca for a canadian account earning 2.40% Annual Percentage Rate (APR). Just today I mailed them a cheque with the initial deposit.

What do I see when I come home? I read here that ING in the States gives 3% APR, something that I overlooked. So I decided to make a little analysis, what would it cost me, were I to invest in the American ING account, exchange rate taken into account.

The data for the calculation:
American ING APR = 3% = .03
Canadian ING IPR = 2.40% = .024
Canadian/American exchange rate => US$ 1 = CAN$ 1.2178 as of April 5th closing by Bank of Canada.

APR = [(amount acumulated at time 1) - (initial investment at time 0)] / (initial investment at time 0)

If I were to invest in Canada, $1 at 2.4% APR will earn me CAN$1.024 at the end of the year.

If I were to buy US$ for that CAN$ 1, it would be $0.821153, and invest it in US at 3% APR, I would get US$0.845788 at the end of the year.

Here's the interesting part -- according to the Big Mac Index, discussed in my previous post, the target exchange rate between Canada and US should be 1.207547. Let's assume that, after one year, the exchange rate converges to its correct state, the one given by the Big Mac Index. So if converted back to Canadian currency, my ~84 cents US would be $1.02133 Canadian, which is less than what I would get at the end of the year investing in ING Canada.

Point proven, I did the right thing by opening a Canadian account!!!



Second order of business is the point made by my Corporate Finance professor.
Ideally, in a publicly traded corporation, one share gets you one vote as a shareholder (or equivalent proportion). She suggested a hypothetical idea that it should be the same way with voting in elections. The percentage of taxes you pay of total amount of taxes paid in the country, gives you the right to have the equivalent percentage of votes, when voting for the president, prime minister or whoever. Isn't that an idea worth investigating???

Market update and Internship first meetings!

Sorry for a delay, this is a post as of Friday, April 1st. I drafted it and forgot about it.
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As proposed, a weekly update of my virtual portfolio on VSE.

and a detailed layout here.

Today was my first serious meeting with my summer employer. He is a senior managing director of this company. As with the meeting before, I had to catch him, because he was meeting-hopping. After finally catching him on at BCE Place, wasting $7 on a cab from the office to this place, we had no time to talk and rushed to the meeting. I really appreciated him taking me to the meeting and listening in on their discussion, without even getting to sign a confidentiality agreement, which I was supposed to do at the beginning of my employment. The meeting lasted about 2 hours, quite informative, yet not exhaustive.

Then we rushed to the company's lawyer, thankfully only across the street. They had to send a response to a particularly nasty group email, which was sent to the whole team of people, working on the current project. That was fun, plus I got to know the lawyer, who is a down-to-earth guy in his 30's. Both of them told me that we will be spending lots of time working together during my summer internship.

Overall, the experience was great. I got to meet new people, see how they waste company time and compare their offices. This is just a joke, actually both of them seemed like two very hard-working individuals. Same said for my employer.

Time studied for actuarial exam -- 0 hours.
I will have to catch up next week after my stats exam.