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Viceroy

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tT
发表于 2011-7-11 19:56 | 只看该作者

Domestic currency return

foreign, exchange, domestic, currency, return
If the exchange rate changes from 1 D/F to 1.2 D/F, what is the domestic currency return wrt foreign currency?
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oneboy

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2#
发表于 2011-7-11 19:56 | 只看该作者
(1.2 - 1) / 1 = +20%

logic: You invested in a forign currency at 1 D/F. Now your converting that investment in foreign currency back to Domestic at 1.2 D/F so you've earned 20% from currency appreciation of your foreign investment.

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Windjammer

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3#
发表于 2011-7-11 19:56 | 只看该作者
I'm pretty sure that's wrong....you're referring to the domestic return in the foreign currency, but he asked what the return on the domestic currency was. It cost $1 to buy a unit of foreign currency, now it costs $1.25 to buy a unit, so the FC got more expensive, and the D currency went down in value.

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cityboy

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4#
发表于 2011-7-11 19:56 | 只看该作者
foreign appreciates so domestic return should fall I guess.

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lcw77

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5#
发表于 2011-7-11 19:56 | 只看该作者
i actually would say that is right.... since we do not know the actual return on the investment, the currency appreciated 20%, so when you translate back to domestic you are up 20% plus whatever the asset return was (i know that is not the exact calc but it is close)...

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infinitybenzo

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6#
发表于 2011-7-11 19:56 | 只看该作者
so answer is -20%, correct?

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wake2000

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7#
发表于 2011-7-11 19:56 | 只看该作者
awesome mate. Thanks

How do you feel overall about your chances for next Saturday?

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NakedPuts00

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8#
发表于 2011-7-11 19:56 | 只看该作者
I'm feeling ok but I think for me it will be all about the AM section. I hate the IPS questions as I can never get em right. I'm ok with the main concepts, but the little detailed sections are my weak area. I honestly think that some portion of passing this exam is due to lady luck because a lot of the people that failed last year would have been definite passers in my book.

What about you? Your one of the first to be answering all the ques (and more importantly being right lol) so I'm hoping come exam day I know as much as you!

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dyga

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9#
发表于 2011-7-11 19:56 | 只看该作者
I am just pretending that I know the stuff

I am also at the same stage like you. I know the main concepts but when they dig deeper than I am dead. AM section is going to be make or break for me too. I haven't score more than 60 in any of the practice tests.

I totally agree that you need luck to pass this exam. There's no way anybody can know everything given in the books. If they ask you from something which you know, you are golden else totally fked. Hopefully they won't play their dirty tricks this year and help us let pass the exam.

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Roflnadal

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10#
发表于 2011-7-11 19:56 | 只看该作者
Hopefully we will both be celebrating our passes and our charters this year along with the rest of the AFers that have sacrificed so much for this exam and designation. I hope this one is worth it, I did engineering undergrad and that was definitely not worth it lol

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