1. avatar says

    Respected Sir
    I really have issues in attempting the theory part of F9. Can you suggest few useful techniques to overcome this deficiency? Like in 7 to 10 marks theory questions how many points are we suppose to write and explain.


    • Profile photo of John Moffat says

      Please don’t ask the same question in different places (and also ask questions like this in the Ask the Tutor Forum and not as a comment on a lecture).

      I answered your other post of the same question!

  2. avatar says

    Thanks again for the superb lecture,my question is directed at the miller orr model.
    must we always convert the interest rate and the variance/deviation to per day or we can calculate it using per annum?

    • Profile photo of John Moffat says

      We would normally do it per day.

      (It is very unlikely these days that the examiner would ask for calculations of the spread – more recently he has given you the spread and asked for the upper level and the return point.)

    • Profile photo of John Moffat says

      Four things:

      1) Of course there is a video – why don’t you watch them in order and then you will see it!!!
      (I know exactly what is in the syllabus, and it is covered in the first lecture on working capital).

      2) Do not write in capitals.

      3) If you have any questions then ask in the Ask the Tutor forum – not as a comment on a lecture on something different!

      4) We do not claim to lecture on every single line of the syllabus. Our lectures are what we teach on courses – some things you have to read for yourself in the free Lecture Notes!

  3. avatar says

    Hi John,

    I just wanted to say a HUGE THANKYOU to you and for your free lectures and course notes. After sitting this exam 4 times, I was at my wits end, so decided to take a different approach to learning. Many people told me not to have the faith in open tuition as it is free, but here I am on results day with a huge smile on my face because I have passed.

    I can now move on to my professional level exams and will be one step closer to being qualified!!!


    Sam 😀

  4. avatar says

    I am stuck on how to put it in the calculator.
    I first put in 3/4 x 5 x 2,000 squared, divided by 0.00014.
    On my scientific calculator this gives me 1.071428571 x 10 to the power of 11. How do I then go from here to putting in the cubed root and getting an answer of $4,750?
    Everytime I push the cubed root button it throws up an error.

    Please help :)

      • avatar says

        Yes, but no help. My main issue is how to get from 1.0714 to the power of 11 to the cubed root. Do I multiply it by cubed root or just put 1.0714 the push thecubed root button? It has been years since I was at school so my knowledge on these calculations is very scratchy.

      • avatar says

        Hello sir,

        In the notes solution to example 3 of this chapter, there is an errata.
        Instead of 4,000,000 you will find 400,000.

        I was crazy trying to find out how do you get this figure until the video lesson!

        Jorge Castells

      • Profile photo of John Moffat says

        Jorge: sorry if there is a typing error – I will check and have it corrected.
        (However you should not be using the notes on there own, because they are notes that go with the lectures – not a study text. It is in the lectures that we expand and explain. )

      • avatar says

        I know I should not use the notes alone, but I have already studied a lot of these subjects in my university degree.

        So, if I’m able to find the solution by myself I do not check the video lecture and I prefer to review extra exercise and exams questions (unless there is theory to complete in the notes that will be completed in the video lecture)

        I know I take some risk, but my personal situation don’t left me too much time to study, so I have not too much choice. Until now it worked for me (probably not for others!).

    • Profile photo of John Moffat says

      2000 squared is indeed 4,000,000

      However, what about dividing by the interest rate, and then taking the third root?

      If you look at the Course Notes, you will find the formula at the front of them, and the answer to the example somewhere at the back.

  5. avatar says

    i am using casio fx-82MS calculator. the amount in the bracket 0.75 * 5 *4000/0.00014 it gives me 107,142,857. before taking cube root. like 0.75 * 5 *4000 equals to 15000 / 0.00014 equals to 107,142,857 before taking cube . and after cube it gives 10350 ? i m really confused ? how to use it on a calculator ?

    • avatar says

      variance = (standard deviation) squared = 2000 squared = 4m and not 4000.

      the figure in the bracket should be 0.75 * 5 * 4 000 000/0.00014 = 1.0714 to the power 11 the cube root gives you 4749.57 and multiply by 3 = 14 248.71 rounded to 14 250

  6. Profile photo of Mahoysam says

    Thanks for making the percentage bit clear! At work, I had a percentage which was 0.01%, I thought this meant 1%!! That actually confused me and I was still confused, until now when you made it clear that there is a difference when you add the percentage sign to the decimal.

  7. avatar says

    Hello, have found all the F9 lectures to be a life-saver- great lecturer :o)

    Please help- I cannot get my calculator to do the Miller-Orr calculation its driving me mad! Isn’t 2000″2 $4,000,000 not $400,000 like is in the answer? Also I get 1.1714, no where near right, I don’t know what I am doing wrong, Many thanks

    • Profile photo of John Moffat says

      @chiaramunton, You are correct about the 4,000,000 – that is a typing error in the answer in the course notes. However the final answer of 14,250 is correct.

      Are you sure that you are taking the cube root (third root) correctly?

      If you say which calculator you have then I will tell you which keys to press (it depends which type of logic your calculator uses).

      • avatar says

        @johnmoffat, Oh wow thank you John I didn’t expect such a quick reply, Yes having difficulty with calculator so that would be great, not sure about cube roots so no probably not. I have a Casio fx-350es plus. Is the 1st part before rooting 3214285714?

      • Profile photo of John Moffat says

        @chiaramunton, The answer before the cube root is 1.071 (with lots and lots of zeros! 10^11)

        I guess the problem is taking the third root (cube root). Your calculator has Polish logic and so I am not 100% sure.
        See if you can get the cubed root of 8. (The answer should be 2).
        I think that you enter 8 then the ‘x root n’ key, then 3.
        If you can get that to work, then try it on your number (1.071 etc) – you should get 4750 (and then you multiply by 3!)

      • avatar says

        @johnmoffat, I’ve got it now finally, was v. annoying :o) Thanks again you really make topics clear , just starting revision now- was daunted by F9 but it hasn’t been that bad after all mainly due to OT :o)

Leave a Reply