标题: Sample qn - ambiguous answer - can u help? Relative PPP [打印本页] 作者: zephyranalyst 时间: 2013-4-22 07:05 标题: Sample qn - ambiguous answer - can u help? Relative PPP
Japan 85.45. 1yr Infl=1.2% Uk. 0.62. Infl=1.6 US. Infl=1.3 According to relative purchase parity, which of the below is accurate? 1) Japan’s will depreciate 2) uk’s will be about the same作者: Siddimaula 时间: 2013-4-22 07:06
Thanks Alan. the question is from one of the samples’
Japan yen/$ 85.45. 1yr Infl=1.2%
Uk.￡/$ 0.62. Infl=1.6
US. Infl=1.3
According to relative purchase price parity, which of the below is accurate?
1) Japan’s will depreciate
2) uk’s will be about the same作者: stockjaguar 时间: 2013-4-22 07:06
Thanks Alan. the question is from one of the samples’
Japan yen/$ 85.45. 1yr Infl=1.2%
Uk.￡/$ 0.62. Infl=1.6
US. Infl=1.3
According to relative purchase price parity, which of the below is accurate?
1) Japan’s will depreciate
2) uk’s will be about the same作者: wizofoz 时间: 2013-4-22 07:06
alanfung86 wrote:
perhaps if you better worded your problem and put the details in a more understandable form, then maybe someone can address your concerns. and what is ‘uk’s will be about the same’ ? CFAI or any study guide will never use ‘will be about the same’ to describe something..it’s either the same or not the same.
I do vaguely recall seeing “about the same” in the CFA sample. It pertains to the question by OP.作者: liquidity 时间: 2013-4-22 07:06
Thanks preppie … This is from one of the samples.Qn# 45.the answer is 2)…. I gues there is sthg wrong with the question.作者: Makavelim3 时间: 2013-4-22 07:06
Got you.
1. Japanese yen should apprieciate, so, the first answer is out.
And if I remember correctly, the third answer is also offbase. So, that leaves UK’s being about the same a better choice than the other two.作者: Benjiko 时间: 2013-4-22 07:07
Right. I somehow thought Jyen depreciates as it becomes 85.03x ..however this means jy appreciates…thanks作者: king_kong 时间: 2013-4-22 07:07
I am with you on this作者: bleach 时间: 2013-4-22 07:07
ov25 wrote:
Thanks Alan. the question is from one of the samples’
Japan yen/$ 85.45. 1yr Infl=1.2%
Uk.￡/$ 0.62. Infl=1.6
US. Infl=1.3
According to relative purchase price parity, which of the below is accurate?
1) Japan’s will depreciate
2) uk’s will be about the same
Yen expected rate: 85.45 * 1.012 / 1.013 = 85.37 = US$ depreciate, Yen appreciate so answer (1) is wrong
UK expected rate: 0.62 * 1.016 / 1.013 = 0.6218 = about the same as 0.62 thus (2) is correct.
I know the question is not set in the best manner but out of the 3 questions, (2) is most likely correct since the other two is obviously wrong.
