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Hi John,
I always find myself getting answers wrong in the Foreign exchange sections when it comes to the interest part of deposit/borrow. Some questions require interest and some do not.
Do you have any tips to help identify when interest should be applied.
Thanks
If you are asking about money market hedging, then interest is always relevant.
If you are asking about forecasting a forward rate, then again interest is always relevant (using the formula on the formula sheet) because forward rates are determined by relative interest rates.
Have you watched my free lectures on foreign exchange risk management, because I do explain the various methods, with examples?
(The lectures are a complete free course for Paper F9 and cover everything needed to be able to pass the exam well)
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