AFM*** ACCA Paper AFM December 2019 Exam was.. Instant Poll and comments ***

Omg i wrongly took 2-5 as i running out of time i just saw in 2 months for 5 months so my brain was like 2-5 supposely 5 mths is 7.

I can understand. Due to time pressure I did some fullish mistakes I am not proud of. :)

I have used 6% and 4.4%, 2 scenarios.

Ummmmm I certainly agree with you,why must we be failing because of time?as if employers consider time and not the knowledge when employing us,they really must be a balance..look at SBL I thought the increase in time to four hours was because of information overload which would be about 14pages but the December sitting it only had about 5pages?now to think of it it how can SBL have four hours with normal exam information whilst AFM 3hours with too much information...

Thought it was quite hard if im honest particularly question 3 - also the depth of the course that was actually tested didnt seem that large - bar one or two small things there was no need to consult the formula sheet at all which i found strange. Q1 - Was happy initially when I saw it in comparison to some of the previous Q1 , part a ) was about the profit centre v cost centre - hadn't seen this tested before - changes that i went through that were required were personnel, attitude to risk, technology to allow it , mgt structure - but these could be miles off. b) the computations of the currency and ir hedging went well , as did the inter co netting , the gamma and delta - went through what this was but didnt address it greatly , the report wasnt great due to time constraints. part c) the 20% equity holder asking about risk - agreed that they may be correct that shareholders themselves should hedge against risk in their portfolios but in this case with IR and FX risk being an everyday part of business it was prudent to do so and expected. Q2 - Relatively ok on the NPV Calcs - made a few silly errors down to pressure nothing else but thats going to happen . VAR -messed up the formula again just exam pressure , and covering sensitivity wasn't great - b) on the possible downfalls in there evaluation - i think that they had said the price was guaranteed by the goverment and this was one of the factors that if under 10% they would reject but though as guaranteed price it was rash to reject if this element below the threshold and all else good Q3 - Nightmare from start to finish if I got 5 from it i would take it - havent seen a q like this set out and was expecting some CAPM, Asset Beta, WACC etc but not to be . Anyway would be doing very well to get over the 50 but such is life - let us know any thoughts.

I thought damn M&A will be in case study (either merging like reverse takeover or unbundling). I’ve never think about currency and interest rate hedging will come together as a case study 50marks. When I did a lots of past exam papers, Interest rate hedging is famous as 25 marks question. And I only remember delta aims to set up riskless portfolio and though I know delta and gamma relates but forgot how. I used a lot of time for question 1. Question 2 Local NPV is like giveaway question. Don’t even need to do risk adjusted WACC. Only a little bit tricky for sensitivity and VAR part. But I didn’t have enough time. All three questions, more marks carried for discussion part (especially Q.3) which is students needed to read properly about given information in the question. Part (a) adjusted profit and net cash balance 2marks, Part (b) adjusted SOFP 4marks and the balance marks are for part (c) discussion. All students know that there is no thinking time in the exam. I found it fair exam but time pressure. And my time management suck! Overall I’m totally disappointed myself.

Please do anyone remember the business names used in AFM December 2019 P4 paper: I remember Loilita restaurants Enjin, curzeteck, dramanleo but the spelling is not correct. Please help if you can

I don't remember names, but why? Youll recognize the question if they put it up as a past paper

Can anyone tell me the formula to calculate investment cost?

Thanks Cathy! I will await the posting from ACCA website.

@khill101 said: Ireland along with few set others are starting CBEs in March for STrategic Pro papers... If it comes to it, I may even jump over to London to repeat in March if I really dont fancy CBE, cross that bridge if and when haha

Belfast still has the paper exam in March 2020 .That’s my plan B in case I fail. Would be much cheaper than flying into London

Feel it was a christmas gift as compared to the past sittings (march,june, september 2019) ACCA made this very easy for us this time and i blew it. Was so time pressured and occupied with answering all the areas that i even forgot the basic 4 free marks the give just to put report, introduction and conclusion. I feel if i had more time i would have guaranteed a pass. But due to time i am not even sure. Even after calculating all the marks i am sure of, i am only getting to 41% but the rest of the marks i am so unsure where the will come from. Guess from here on out its just Faith.

@willis1951 said: This was a simple exam technically except for Q.3 but was unnecessarily time pressured with very few marl allocation!It seems this examiner has missed point of setting this particular exam because he seems more inclined to testing time management rather than the skills.Even in offices,you need time to think and analyze the problem and organize your solution before writing it out.In this exam,this was missed out instead questions were designed with so much details but with little time to assemble the information.I HAVE SERIOUS RESERVATIONS WITH MARK ALLOCATIONS IN THIS SITTING.TOO MUCH QUESTION REQUIREMENTS WITH MASSIVE INFORMATION WITH VERY FEW MARKS.LOOK AT Q.3 a)2 marks to calculate the net cash flow from restructuring,4marks to construct a Revised statement of Financial position following the Restructuring.!This paper was unnecessary time- pressured for no good cause!If the examiner has run out of good technical questions,he/she should step aside and leave a new examiner to take over the setting.THIS PAPER WAS PURE EXAGGERATION OF TIME PRESSURE.Candidates should be tested on a reasonable balance between technical aspect and time management.I will fail this paper not because of lacking knowledge but the reasonable time pressure created by the examiner asking too many small questions which require a lot of information for little marks.The examiner missed the point here.By the way,who is the current examiner for AFM?

I agree to this entirely, I studied everything and knew how to answer but just time was an issue and my passing mark has been risked. And so when i left the room i just thought and it clicked i forgot to calculate the basic things and include the easiest of marks.

This exam was quite hard. As most of the people said, section 3 was horrible. Very few past paper had this sort of question 3. Q1 - 'changes from treasury department being a cost center unit to a profit center unit'. I mentioned about budget difference, changes regarding objective of the treasury manager, treasury dep can now invoice with mark up to other dep for their services and make profit...... What did you guys talk about? - 'currency hedging: using netting method for intercompany transaction, for payment to supplier = futures or money hedged market' Net result for intercompany transaction, I got zero. I got that futures was a cheaper option than MMH for the supplier transaction - FX hedging: using FRAs and option. I concluded that option was a better hedge solution as it give more flexibility as the IR would increase in the future. What did you guys go? Not sure if my calculation was right, but found this part quite ok. - gemma and Delta - didnt remember anything about that. sad could have been easy mark - reduce risk of portfolio by diversification. I mentioned about unsystematic and systematic risk. Not sure if anyone put this. Please comment on what you wrote about. Q2 - NPV - was ok as Revenue, VC was already given, needed to calculate FC, WC, TAD, Tax - so it was quite ok got a positive NPV secondly needed to calculate sensitivity analysis on initial investment and sales. I got very confused on how to calculate SA sales. as I thought I need to get the price/unit. I was stuck for almost 10 min in this part. then just took the revenue and discounted it. How did you guy do it? finally had to calculate the VAR with a 95% confidence level. That was ok too b)discuss about risk and how to mitigate them. Talk about other implication that need to be considered such as strategic implication, legal…. Not sure if I misinterpreted the question???!!! C) option to expend or delay = Talk about real option that give flexibility and that manger would need to calculate and analyse real option. Q3- OMG – big mess for me I didn’t understand the marking here. I still think that the examiner might have done some sort of mistake with the marking. How can calculating and discussing about gearing and interest cover be 7 or 9 marks??!! Don’t remember exactly if it was 7 or 9. And then another 9-10 marks for discussion?!!!! Conclusion, Obviously I did not get time to finish the paper. And I think I would most probably fail because of this Q3??!!!!!!!! Please feel free to share your answers with me.

My someone please confirm if the first question in part B for multinetting we were supposed to be dividing or multiply...

@annie.mwanza1991 said: My someone please confirm if the first question in part B for multinetting we were supposed to be dividing or multiply...

Hi Annie, I am not sure myself about what i got or if i got a pass mark. But i believe if we were converting other currencies to dollars, If the currency we are converting to dollars is a weaker currency we would have to divide by the dollar spot rate. then if the currency we are converting to dollar is stronger than the dollar the we have to multiply. And i do remember the was only one Euro subsidiary and that was the only one we had to multiply to give us the dollars we needed. But for the others we simply divide to give us the dollars we need as the dollar was the stronger currency. Hope this is helpful. And hope this gives you some form of security than i have over the exam.