[jingz]

Thanks. Yes, the examiner said that currencies in the exam will be quoted as indirect quotes. But BPP text book( 2011)gave some examples, which seem not follow formula. please see Page: 423 – example 3.4.1 and 3.5.1
3.4.1:
A US company is expecting to receive Kuwaiti dinars in one year’s time, the spot rate is US dollar/dinar 5.4670. The comany could borrow in dinars at 9% or in dollars at 14%.Prodict what the forward rate:
The anwer was given:

Forward rate= 5.4670*( 1.14/1.09)

Who can explain if it is correct?

[jingz]

Glad to see people studying P4 here, pls count me in the group. I am planing to take P4 in June 2011. My email: jing_zhang@hotmail.co.uk.

Can anyone know if BPP new study text book came out for 2011 or not?

Thanks!

[Author]

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