Schweser Vol1. Q40 FCRP current, its

siavosh

oK….
Expect JPY/USD spot rate to fall by 2% from its current level. The FCRP is closest to:
My intuition tells me: JPY/USD fell, so, F-S/S = -2%…. FCRP = -2% -(Rdc- Rfc) so, = -2- (3.88-7) = +1.12///
But schweser gives the answer as - 1.12% and in the explanation they do 2-(7-3.88)
For me if it is quoted JPY/USD, then JPY is Dom…
What am I missing
Thanks and lets kill this

wake2000

If it were quoted JPY:USD, JPY would be DC.
However, JPY/USD is a direct quote to a US investor, with USD as DC.
I think…

infinitybenzo

Really….I haven’t thought of that, that might be it…tricky… I always first the one that comes first is dom… I think in Brazil when we ask, how much is the dollar? People say its R$1.85 …..its R$/$, thats our perspective…
Tks….Anybody could confirm this?

bolligerallstar

I think SM has it backwards.
USD: JPY = JPY/USD JPY is a direct quote. The domestic currency i think depends on the question. The question will say whether from the perspective of US or JPY investor. For example if they say USD investor you would need to take the inverse of all the quotes.

YAhmed

Well, in the vignette it talks about the US bank, so its an american perspective, but if you’re given JPY/USD then JPY is dom right? Why doesnt it work the way I did it?Tks!

yodacaia

Can you check the question your referencing again, i looked in the econ section but questions don’t go passed 20ish. Are you referring to something else?
If its from the perspective of a US bank then US is the domestic currency. If they give you Jpy/USd then you need the inverse of the quotes.

hoangvu90

Think of “/” as “per”, a quote of JPY/USD is units of foreign ccy per domestic ccy. USD is the DC.

segalm

There you go Justin, thanks…