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November 21, 2020 at 12:28 pm
where is the chapter for the business valuations and market efficiency can you please share the video lecture name sir ?
John Moffat says
November 21, 2020 at 2:10 pm
Market efficient is in Chapter 2 of our free lecture notes and the lecture that goes with the chapter. Business valuation are in Chapters 15 and 16 (and the lectures that go with them).
The lectures are indexed in chapter order – the order in which they are intended to be watched.
July 1, 2020 at 9:08 am
Hi John. Thank you so much for making this concept so simple and precise. It was to the point and saved a lot of my time. 🙂
July 1, 2020 at 10:16 am
Thank you for your comment 🙂
May 30, 2020 at 7:25 am
Hi John, Thank you for your wonderful lectures, could you please help me by telling where can i find the videos for Fishers effect and Interest rate parity 🙂
May 30, 2020 at 9:42 am
Although they are summarised in Chapter 22 of the free lecture notes, they are covered in different lectures. The Fisher effect is relevant when calculating the nominal cost of capital and is explain in the lectures on investment appraisal with inflation. Interest rate parity is relevant for calculating forward exchange rates and is explained in the lectures on foreign exchange risk management.
November 29, 2019 at 3:16 pm
Hey John, I was confused about a Question i came across in the specimen Exam on the ACCA website. In your lecture you have said always use the purchasing power rate but in their answer they have applied the interest rate parity formula. Hence what is to be done when both rates are mentioned? (this is question-1 of the specimen exam)
The home currency of Acaba Co is the dollar ($) and it trades with a company in a foreign country whose home currency is the Dinar. The following information is available:
20.00 Dinar per $
3% per year Home country
7% per year Foreign country
2% per year Home country
5% per year Foreign country
What is the six-month forward exchange rate?
20.39 Dinar per $
20.30 Dinar per $
20.59 Dinar per $
20.78 Dinar per $
Answer- 20 x (1·035/1·015) = 20·39 Dinar per $
November 29, 2019 at 7:29 pm
I do not say to always use the purchasing power parity formula at all!
We use purchasing power parity when forecasting a future spot rate, but we always use the interest rate parity formula when calculating forward rates (as is asked for in this question). This is all explained in my lectures on managing foreign exchange risk.
November 30, 2019 at 5:36 am
Oh, I’m sorry. Thank you for clearing my confusion and the quick reply 🙂
November 30, 2019 at 9:00 am
You are welcome 🙂
November 25, 2019 at 9:44 pm
Please ignore my last comment. After viewing the lecture, I now realise that the Fisher formula is relevant in this part of the course, as well as the investment appraisal section.
November 25, 2019 at 9:41 pm
Am I right in saying the Fisher Formula is for calculating the real rate of inflation in investment appraisal, and is not relevant to this part of the course? Just checking, as per the message below.
May 30, 2019 at 1:41 pm
In lecture notes there are The fisher effect and interest rate parity.
Where are can find videos regarding them?
May 30, 2019 at 1:59 pm
May 30, 2019 at 4:11 pm
October 31, 2019 at 2:22 pm
which lecture is the video, care to share?
August 13, 2019 at 3:37 am
where is the lecture notes for fishers effect and interest rate parity
August 13, 2019 at 7:57 am
Chapter 22 of our free lecture notes and the free lectures that go with them.
April 18, 2019 at 8:46 am
In Interest Rate Parity, why does country having lower interest rate become stronger and higher interest rate become weaker?
April 18, 2019 at 10:43 am
Interest rate parity is not used to forecast spot rate – it is used to determine forward rates, and why this is the case is explained in my free lectures on forward rate and on money market hedging.
October 12, 2018 at 3:31 pm
In example 2, how do we say that yen is stronger and pound is weaker?
October 13, 2018 at 10:32 am
Because one pound buys fewer yen.
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