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Domestic/Foreign currency

Can I just get some confirmation on the formats, especially for use in the interest rate parity formulas.

FC/DC?

DC:FC?


Are those what we will see on the exam?

Yea

DC:FC = FC/DC

TOP

DC:FC = indirect, the units for any numbers given are FC/DC. "One unit of DC, buys X units of the FC".

I think I read in the CFAI material, DC:FC is what will be on the exam. But that was in the economics section. Who knows what we'll see for FSA, Equities, or Derivatives.

TOP

The quotation should not be a problem as long as you know DC:FC = FC/DC

The direct method is self explanatory. Only thing to remember is you must use the correct rate to price Currency forward/future contracts

TOP

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