FIN630 GDB 1 Solution Autumn 2021-GDB Solutions-VU
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00:00In the name of Allah, the most Gracious, the most Merciful.
00:02Peace be upon you, dear students and viewers.
00:04Welcome to my YouTube channel, Degree No. 5.
00:06In today's video tutorial,
00:08we will solve GDV No. 1 of Fin 630,
00:12which belongs to Atom 2021.
00:16But before that,
00:18I request my viewers
00:20that
00:22when you send me a GDV assignment,
00:26kindly try to
00:28submit the PDF file as it is,
00:30so that I can easily
00:32read out and understand it.
00:34If you send me a screenshot,
00:36please take a screenshot
00:38with ease
00:40and also check
00:42whether the data
00:44in the screenshot is visible or not.
00:46Kindly check.
00:48It is cut from here.
00:50And after that,
00:52I made some adjustments
00:54from here
00:56so that I can complete
00:58the remaining sentences.
01:00So that when I read it,
01:02I can understand the related requirement
01:04and also answer it.
01:06I hope you will
01:08cooperate on this in the future.
01:10So let's go.
01:12Let's read out the
01:14discussion statement of our GDV,
01:16then the related requirement
01:18and then the solution.
01:20First, we have to discuss
01:22the application of circuit breaker
01:24in this scenario.
01:26Circuit breaker is a regulatory
01:28instrument.
01:30It is a regulatory instrument.
01:32If we talk about Pakistan Stock Exchange,
01:34any broker,
01:36any investor
01:38can apply it
01:40or not.
01:42He can follow it.
01:44He can decide
01:46whether to apply it or not.
01:48He decides
01:50according to the circuit breaker.
01:52It is triggered
01:54if the index or any stock
01:56cross the price range
01:58within which it was allowed to move.
02:00It is said that
02:02circuit breakers
02:04are triggered
02:06when
02:08the price of any stock
02:10has a range.
02:12Range means low limit
02:14and upper limit.
02:16When it moves
02:18on the downside
02:20or the
02:22maximum or minimum limit
02:24on the upside,
02:26it tries to cross it.
02:28Its core
02:30purpose is to prevent
02:32excessive speculative
02:34gain losses on security
02:36or catastrophic losses in the market.
02:38Its fundamental
02:40goal
02:42is to remove
02:44speculative effect
02:46or stop it
02:48from the market.
02:50It causes a lot of losses.
02:52For example,
02:54it happened in August 2005
02:56when the market crashed.
02:58Next,
03:00Sapphire Fibers Limited
03:02SFL was listed on the
03:04Stock Exchange of Pakistan
03:06on 5th June 1979.
03:08It is a company
03:10called Sapphire Fibers Limited.
03:12Its symbol
03:14is SPL.
03:16It was listed
03:18on the Stock Exchange
03:20on 5th June 1979.
03:22The major activities
03:24of the company include
03:26manufacturing and
03:28sales of yarn, fabrics and garments.
03:42On 15th November 2021,
03:44the stock of SFL closed
03:46at Rs. 70.40.
03:56Furthermore,
03:58the Circuit Breaker
04:00in Pakistan Stock Exchange
04:02was at 7.5%.
04:14As of this and the next day.
04:26Suppose you are working
04:28as a broker
04:30in Pakistan Stock Exchange
04:32for last few years.
04:34Suppose you are working
04:36as a broker
04:38in Pakistan Stock Exchange
04:40for last few years.
04:42On 16th November 2021,
04:44the closing date
04:46is 16th November 2021.
04:48The closing date
04:50is 16th November 2021.
04:52The viewers
04:54and students
04:56have sent me
04:58pictures and images.
05:00It is difficult to read
05:02these pictures and images.
05:04Let's see what happens next.
05:06Circuit Breaker in Pakistan Stock Exchange
05:08was at
05:20An investor of SFL named
05:22Mr. Muhammad approached you.
05:32After thorough discussion
05:34on the current situation
05:36of Pakistan Stock Exchange
05:38and the company,
05:40he finally took a decision
05:42to sell 100 shares of SFL
05:44on that very day
05:46via computerized trading only.
06:02Moreover,
06:04he mentioned that
06:06he wants to sell the stock
06:08at any price above Rs. 800.
06:28Keeping in view
06:30the concept of Circuit Breaker,
06:32you are required to briefly discuss
06:34Yes, No comments along with reasons
06:36whether it would be possible
06:38for the stock to be sold
06:40above Rs. 800 or not.
07:00Moreover,
07:02support your answer by showing
07:04necessary calculations for
07:06price ceiling and price floor
07:08of SFL stock.
07:30Let's go to the solution.
07:32The answer is
07:34Part 1.
07:36I have divided it into two parts.
07:38In Part 1, we have to answer
07:40Yes or No with reasoning
07:42and then we calculate
07:44the Circuit Breaker
07:46for the stock of SFL
07:48on which it is sold.
07:50In Part 2, we have to
07:52answer Yes or No with reasoning
07:54and then we calculate
07:56the Circuit Breaker
07:58for the stock of SFL
08:00on which it is sold.
08:02In Part 3, we have to
08:04answer Yes or No with reasoning
08:06and then we calculate
08:08the Circuit Breaker
08:10for SFL stock
08:12on which it is sold.
08:14In Part 4, we have to
08:16answer Yes or No with reasoning
08:18and then we calculate
08:20the Circuit Breaker
08:22for SFL stock
08:24on which it is sold.
08:26because the price of Rs. 800 is exceeding the ceiling price of Rs. 795.5 per stock on this day.
08:57So, if there is a limit, then they can't even sell it at Rs. 796.
09:03So, this is its ceiling price.
09:26That is, we can determine the range.
09:28A band in which the price of the stock can move.
09:35There is a limit, it can't be less than that.
09:37An upper limit can't be more than that.
09:41We have an upper limit of ceiling price.
09:44And we call it Rs. 740.
09:47Now, if we want to go upward, then 7.5%.
09:52If I multiply it by 1.075, then I will get Rs. 795.5.
09:59Similarly, if I want to go downward, then I will get Rs. 0.925.
10:12If we multiply it by 1.075, then we will get Rs. 684.5.
10:17Now, if we take out its difference, then we will get Rs. 55.5.
10:21As you can see, the band or range that we have is Rs. 55.5.
10:26When we add it to Rs. 740, then its ceiling price will come.
10:30If we reduce it by Rs. 55.5, then we will get its floor price.
10:37So, here our DDP is over.
10:40If you have any questions or queries, then you can ask them in the comment section.
10:44If there is any mistake in the calculation, then mention it in the comments section so that everyone can benefit.
10:50Thanks for watching.
10:52Take care of yourself and subscribe to the channel.
10:55Don't forget to press the bell icon.
10:58Assalamualaikum.