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ACCA F9 lectures ACCA F9 notes
June 2, 2016 at 3:20 pm
My question is that the forward discount rate was not stated that it is in Cents(c),but you also divided it by 100.
John Moffat says
June 2, 2016 at 5:54 pm
But as I say in the lecture, it is always quoted in the smaller unit of the currency (which in the case of dollars is cents). The exception (as I also state in the lecture) is Yen where it is quoted in Yen as well.
February 18, 2016 at 9:57 am
Sir you said “For example, it the exchange rate is $/€ 1.50 (which means 1.50$’s per €) then if you are converting from $’s to €’s then you divide by 1.50. If you are converting from €’s to $’s then you multiply by 1.50.”
In our question we are converting from £ to buy $ so we can pay $, why then do we divide instead of multiplying?
February 18, 2016 at 1:10 pm
Yes, but need to convert from $’s to find out how many GBP we will need to be able to buy the $’s.
If you multiply the answer by the exchange rate then it will come to the exact amount of $’s that we need.
Md. Abdullah Hel Kafi (Rashed) says
December 4, 2015 at 5:02 pm
I’m going to sit for exam in Dec. 15. For this exam season currency future, currency options and currency swaps is important option for multiple question.
November 18, 2015 at 6:52 pm
I couldnt understand the point where you converted cents to dollars and how is the difference calculated? Ive watched it 3 times but cant understand.
November 18, 2015 at 6:56 pm
The are 100 cents in 1 dollar 🙂
November 24, 2015 at 7:09 pm
November 16, 2015 at 9:11 am
Sir, please how will you know when you are to divide or multiply? It confuses me every time especially in example 4.
November 16, 2015 at 9:15 am
I thought when we are receiving, we multiply and when we are paying, we divide?
Why was $150,000 divided by 1.5334 instead of multiplied by 1.5334?
November 16, 2015 at 9:22 am
It has nothing to do with whether you are paying or receiving. Whether you multiply or divide only depends which currency you are converting.
For example, it the exchange rate is $/€ 1.50 (which means 1.50$’s per €) then if you are converting from $’s to €’s then you divide by 1.50. If you are converting from €’s to $’s then you multiply by 1.50.
I do suggest that you watch the first lecture on foreign exchange risk management again because I work through several examples of this.
(Receiving or paying only effects which of the two rates you use when you are given a spread – it has no relevance in terms of whether you multiply or divide)
November 16, 2015 at 9:51 am
Thank you Sir. I do appreciate it.
November 16, 2015 at 9:55 am
You are welcome 🙂
April 14, 2015 at 4:02 pm
If we are given a question without telling us which rate (spot or forward) to use. Which rate should we use?
April 14, 2015 at 4:03 pm
It will be clear from what the question is asking you to do!
September 13, 2015 at 6:25 am
As your notes 1st number is the rat at which bank sale $ to us and 2nd number is the rate at which bank buy $ from us
In example 3
We are in america we need to pay in UK .so we take $ and go to bank we sale Dollar and buy from us $ so there must b 2nd numbr as bank buy $ from us and tranfer to UK in pounds.
September 13, 2015 at 9:14 am
I don’t know what you mean. In example 3 we are not in America, we are in the UK.
September 13, 2015 at 10:50 am
Sir we need to pay$200,000 we are in america and we need to pay in uk ..
i go to bank and sale $ to bank so bank buy from me $ so sir when bank buy $ must be 2nd rate used why you use 1st rate and other thing is that why we make division ? please sir tell me.. Example 3
September 13, 2015 at 10:58 am
You need to read the question again. We are not in America at all. We need to pay $200,000 and we need to convert to GBP.
Therefore we divide by 1.4910 ( The 1 month forward rate for purchasing $’s) because the question says that there are that many $’s to the pound.
1.4910 is the rate to use if we are buying $’s. (if we converted at 1.4970 it would end up costing us less, which would be ridiculous – it is the bank who profits and not us.)
April 14, 2015 at 4:31 pm
ok. Thank you sir.
May 23, 2014 at 5:19 pm
why have we calculated the 2M forward difference as 0.0083-0.0092 although there is no c next to the figures in the question!!!
As you mentioned in the previous question that when c is mentioned .. this means the difference is in Cents !!
May 23, 2014 at 8:44 pm
In practice they do not write c against it – in practice it is always quoted in the lower unit of currency (in this case cents) when given as a difference from spot. (The only exception is Yen, but this is not relevant for the exam)
(In fact, the current examiner usually gives the forward rate directly rather than quote it as a difference from spot, and so the problem does not tend to arise these days in the exam.)
May 25, 2014 at 9:41 pm
thanks Mr John
May 6, 2014 at 10:42 pm
One Word : AWSOME LECTURE 😀
shahbaz Gohar says
October 23, 2013 at 8:13 pm
plz tell me where is “CLOSE-OUT OF FORWARD CONTRACTS” ………
October 23, 2013 at 8:29 pm
what do you mean, where is it?
It is futures contracts that you close out (not forwards), and closing out means finishing the deal (if you buy futures then you have to sell them at a later date; if you sell futures then you need to buy them at a futures date)
Calculations on futures cannot be asked in F9 – you can only be asked to describe how they work.
October 24, 2013 at 7:59 am
Where it is in notes n lectures ………. Coz I can’t understand it ……. From bpp text
October 24, 2013 at 8:05 am
If you look at the contents list on the first page of the Course Notes you will find ‘foreign exchange risk management’. It is in there!
You will find the links to 7 lectures on Foreign Exchange Risk Management on the main F9 page of this website.
May 20, 2013 at 10:13 pm
I keep getting the following error:
Server not found: rtmpt://r.acca.opentuitioncom.netdna-cdn.com/play
Was in the middle of the video. Usually it’s OK, but once in a while I get this message.
The lectures themselves are very helpful. I huge thank you to John an to this site!
May 20, 2013 at 11:09 pm
Please try another browser
November 24, 2012 at 8:19 am
hello, Install Google Chrome and through it will work. at least this helped me.
October 31, 2012 at 10:32 am
Am getting this msg when i want to play the video Server not found: rtmpt://r.acca.opentuitioncom.netdna-cdn.com:80/play please help
October 31, 2012 at 11:49 am
October 30, 2012 at 10:37 am
I searched through the FT, and I couldn’t find any quoted rates for future contracts.
May 21, 2012 at 10:04 am
I am not understanding, so he is buying in dollars, therefore I would have thought that he should receive the less money, being 1.4970 rate totalling £133600.53 and not the higher amount £134138.16 as the bank is not benefiting from this, but I am.
Have i got this wrong ?
June 7, 2012 at 11:30 am
@fenechbrian, Hi Brian, you said “he is buying in dollars”. This is incorrect, the lecturer said we assume the company is in the Uk unless told otherwise, so we are buying Dollars, not buying IN Dollars, and we are buying with Pounds. Therefore use the Company is buying/selling rule, which will give you the correct figure.
April 22, 2012 at 2:08 pm
April 15, 2012 at 5:49 pm
the voice is very clear but no video showing.
December 8, 2011 at 5:47 pm
Please the video is not playing, Kindly assist.
December 8, 2011 at 7:24 am
MAN I REALLY NEED TO MEET U IS THERE ANY WAY POSSIBLE????
October 28, 2011 at 12:37 pm
This one moved smoothly. John Moffat never stops to get me interest in his sessions!!!
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