Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FM Exams › Exchange rates
- This topic has 3 replies, 2 voices, and was last updated 7 years ago by Anuja Nair.
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- August 23, 2016 at 1:54 pm #334744
Hi sir, in my lectures notes, i came across one question that expressed the forward rate in the following manner .
One month forward rate: ($ per €)
1.7829 +- 0.0003What does this mean ? So how do we know which is the smaller figure and the bigger figure ?
August 23, 2016 at 4:38 pm #334765Why are the following statements incorrect ?
Statement 1 : Governments can keep interest rates low by buying short dated government bills in the money market.
Statement 2 : Expectations theory states that future interest rate reflect expectations of future inflation rate movements.
The 2nd statment is incorrect because it has got no link to Expectations theory right ? What about the 1st statement ?
August 24, 2016 at 6:33 am #334833First question:
I deal with this in my lectures.
The two rates are 1.7829 – 0.003, and 1.7829 + 0.003.
It is then obvious which is smaller and which is bigger 🙂Second question:
Whether or not the government buys bills in the market, has nothing to do with expectations.August 25, 2016 at 1:46 pm #335147Okay thank you .
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