*** ACCA P4 June 2017 Exam was.. Instant Poll and comments ***

I scored 84 for my F9 and average of 70 for all other 4 P papers, but P4 is so so difficult and time pressured to me.

Just aim for a pass this time.

honestly, i’m done. this paper is too one dimensional. can’t go through it again.its like taking a math paper. just numbers.
we are all accountants and we are all taking our last papers, so we are all relatively good at math, and we are putting in a lot of work, put our lives on hold and taking it seriously because we all know it is a hard paper. For so many of us to feel like we just went blank… there must be something wrong
if i had put this much time and effort in any other paper, i would probably wouldn’t feel as bad.p7 forum people are discussing concepts..a machine left in a warehouse, customer didn’t take it yet, what do you do, is it revenue? is it still under stock? reminds me of why i started this course in the first place. all that work just cant mean this little.

hi all. as usual hard paper p4. no way.
the point is that the study text and practise book do not cover enough everything..that s the point. we need to dig in youtube for extra lessona exercises comments..
one question..in q2 or q4 do not remember it was written:DO IGNORE BASIS RISK..what does it mean?

How many marks was Q3b?

The moment we were told to start, I first checked the section B qns to choose the ones I could deal wit and selected Qn 3 & 4 coz I felt I could do them as per the requirements.

However the different rates of inflation and working capital tricks made Qn 3 rather daunting but I did what I could and moved on.
I wonder why the examiner had to give us initial working capital of Rs800 and then telling us that it will increase by &90 for the next 3years.
I got confused but made my assumptions on how I did it..
Though I didn’t complete because if time pressure

Qn 4 was the only one I answered wit confidence at least though I hope I didn’t mess up wit basis…
I discovered the “options on futures” gave the Lowest cost compared to collar and futures.

As for the monster Q1..
Thank God part a) was there for easy marks & I believe I’ll get at least 8 out of 11

Then moved on to compute MV of target using FCF then I deducted off debt to get the equity value.
It’s the equity value that I divided by the number of shares to get the initial share price. I got smthing like 1.47 per share
For additional value created, I think I messed up but just moved on.

As for percentage gain…
For cash I just got cash price of 1.84 and compared with the initial share price of target ie (1.84/1.47)-1
For share for share….
I don’t know Wat I did coz the whole thing
of $0.33 and &0.67 confused me….
I ended up interpreting it in my own way and moved on ….

I tried computing the Value of Acquirer using FCFE to determine the whole thing of divided & it’s impact but I ended up not doing the final answer due to time as I had to ensure at least I do something on all parts of the qn. It’s upon examiner to award me for the steps I had managed to take……

But over all Q1 was a real monster

Keeping fingers crossed for a pass.

Since the beginning of 4 attempts a year ACCA is skipping publishing two questions from each attempt so is there anyway that we can get those skipped actual questions.

@farhantahir786 said:
Future seems accurate. I didn’t bother with the numerical costs coz of time issues (just work in percentage rates as it’s faster and allowed I think). But future deal was most expensive. I think that was a given because the rates fell. So options are always better when rates fall. Collar was cheaper to (only slightly…).

Wouldn’t the collar be the most expensive? You wrote a call option on interest rate futures, which gives someone else the right to benefit is rates fall. Upon the interest rate falling, that person would then exercise their right, and you’d have to pay them the difference.

with a collar, you calculate the premium of the cap you bought (put option) and the receipt from the floor (call) you sold.

in the question, only the floor was exercised.

costs was = (premium of cap) + receipt of floor – (loss from exercising the floor )

@alemodique said:
hi all. as usual hard paper p4. no way.
the point is that the study text and practise book do not cover enough everything..that s the point. we need to dig in youtube for extra lessona exercises comments..
one question..in q2 or q4 do not remember it was written:DO IGNORE BASIS RISK..what does it mean?

please confirm the IGNORE BASIS RISK!!!!! if it is really written in q4 for the interest rate hedging then pleeeeaase let me know”thx

Basis risk is the risk that it doesn’t move in a linear manner. Basis would still exist however.

That’s my understanding anyway

yes mansoor, it did say to ignore basis risk but it wouldnt affect our calculations. there was another similar past paper question that said the same thing, and the recent examiner i think puts that a lot in his questions. to ignore basis risk i think he means to assume that basis would be diminished in a linear matter , ie at maturity it would be 0

Hi, I really felt for you when I read your comment, especially the bit about took all your strength just to read the paper, it’s so hard trying to remember it all when under pressure. I only did the calc on Q2 didn’t even attempt calculations on Q1 I just answered all the questions that didn’t need figure analysis, I know I haven’t got enough marks to pass.