ACCA P4 Foreign Exchange Risk Management: Exchange rates
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Pardon me John, but why aren’t there any lectures on business valuation, reconstruction and re-organisation? These are important topics as well. Right?
Business valuations and mergers are certainly important, but there are no techniques involved that are not covered in the other lectures. The problem is more one of approach, which is why I have recorded lectures going through a few question 1’s from past exams, where as well as dealing with the technical content I discuss the approach. You can find them linked from the main P4 page as ‘revision kit live’.
Thank you for this lecture, Sir! The rates always used to mind boggle me. You have cleared my confusion. God Bless!
You are welcome 🙂
Sir,
Are there lecture for the following Chapters?
– Chapter 15: Mergers and acquisitions
– Chapter 16: The valuation of acquisitions and mergers
– Chapter 17: Corporate reorganization and capital reconstruction schemes
Thank you!
No.
Chapter 15 is purely written and does not warrant a lecture – it is for you to read yourself.
Chapter 16 has involves no techniques that have to already been covered in earlier chapters. The problem is one of approach to the question and for this reason I have recorded several lectures working through a few past Question 1’s from the exam, where I discuss the approach as well as obviously work through the technical aspects.
Chapter 17 is really a financial accounts topic (even though it is asked from time to time in P4) and is therefore revision from P2.
Thank you very much!
You are welcome 🙂
I can’t see chapter 15 and 16 for mergers and acquitions. where are they?
Please ask this sort of question in the P4 Ask the Tutor Forum and not as a comment on a lecture on something different.
To make it easier to remember, try reading $/£ as $ per £. E.g. If the $/£ rate is 0.77 read it like $ per £ is 0.77, per £ means one Pound.
Thanks.
Hi John
I am loving your lectures thank you. I am wondering however will I cover enough material with these lectures and the BPP revision kit or should I be using the BPP study text also?
Thanks 🙂
The lectures cover everything you need to be able to pass the exam well.
You need to practice lots of questions and your Revision Kit is fine for that.
You do not really need to use the Study Text. Best is to use it if there is anything you are not clear about in the lectures or if you have time for extra reading.
And please in future ask questions in the Ask the Tutor Forum rather than as a comment on a lecture 🙂
Hello Sir, I am very pleased that I found your lectures. These Forex rates always confuse me, unfortunately thats my third attempt at p4 , while I passed all papers at first attempt, so I am so much worried but I hope now I gain plenty of good marks in march attempt.
Thank u very very much Sir,,,
You are welcome, and good luck 🙂
This is different from how currency pairs are quoted in real life though. EURUSD = 1.1000 means 1 euro (the base currency) is equivalent to $1.10 (the quote or counter currency).
In depends which country you are in – some countries quote one way and some countries quote a different way. There is no ‘world-wide’ rule.
The exam always makes it clear which way round the quote is given.
Hello sir can you please help me with the following – are forward rate agreements the same as future contracts? and what does it mean when it is quoted like this 6V9 – 7•30 – 7.00%
No – FRA’s are not the same as futures.
You have asked this below a lecture on foreign exchange risk management, whereas FRA’s relate to interest rate risk management (and are dealt with in those lectures!).
It is where the bank will fix an interest rate today for a loan or deposit starting on a future date.
In your example, it means that for a loan starting in 6 months time and finishing in 9 months time (i.e. a 3 month loan) they offer fixed interest of 7.00% per year on deposits and charge interest of 7.30% on loans.
Ok thank you
Okay here is another silly question well there isnt right. We in UK we need to receive $ therefore inorder for us to receive $ im in the bank what do i do sell or buy pounds? On the other hand if we need to pay$ we need to buy $ therefore we have to sell pounds in order to buy $. What is the rule here? Im imagining myself at the bank to pay $ and what i would do over the counter in the bank.
If you receive $’s from a customer, then you will sell the $’s to the bank and receive £’s from the bank (same a buying £’s from the bank and paying for them in $’s)
so if you need to pay $ then u buy pounds from the bank?
No – why would you want to buy GBP’s if you are in the UK and need to pay $’s??
If you need to pay $’s then you will buy $’s from the bank which means selling GBP’s to the bank.
really is that it?
Is what it ???
whether u need to multiply if u use first currency and divide if using second currency
Hi I still get confused when to multiply or when to divide i know which exchange rate to use but not sure whther to divide or sell
Am i right by saying if you need to calculate the first currency you multiply and if you need to calculate the second currency you divide?
That’s correct 🙂