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Dear sir,
Today I took AFM exam. Thank you very much for your free lectures. Your lectures assisted me a lot. I hope to pass. The biggest problem that I faced is time shortage. I don’t know how to overcome the time shortage issue. Also, the spreadsheet that they have provided is different from Microsoft Excel.
They mentioned in many questions like 10 marks or 4 marks or 7 marks will be awarded on basis of presentation including format, analysis, professional skepticism etc. I don’t know what does it mean. The spreadsheet that they have provided we cannot use many functions like normal excel. So what does format here means?I found in one question which was related to adjusted present value, they said that for bank loan they are considering interest rate swap. They mentioned two companies which could borrow in fixed and floating. I compared our company floating and fixed interest rate with both the companies. I found that our company floating rate was having large difference with second company. Then I ignored the third company and just considered the second one as the second one floating rate was having large difference with our floating rate. Then I checked which company can borrow this floating rate cheaply. Then I subtracted the interest rate difference between fixed and floating rate and then I assumed this to be total saving which I equally distributed among our company and second company.
i.e., total difference between floating rate was 0.9 and between fixed rate was 0.3. Saving = 0.9-0.3 = 0.6. Total saving per company = 0.6/2 = 0.3
Our company could borrow at fixed rate of 6 so after saving it got 6- 0.3 = 5.7.The reason that I selected our company to borrow at fixed was because other company can borrow floating rate cheaply.
The reason that I only considered the second company as our swap partner was because there was 0.9 difference between our company and its floating rate. This 0.9 was maximum difference compare to all other differences i.e., the interest rate differences between fixed and floating of our company, the second company and third company.
Have I done it in a correct way?
Thank you.
Thank you for your post and I do hope that you have passed.
The time pressure is a problem for everyone so do not worry too much. If the worst does happen (which I hope is not the case) and you do have to resit the exam then ask me in this forum and I will give you some suggestions as to how to deal with the time pressure.
The spreadsheet is not Excel (although is similar in many ways). However there are practice exams using it on the ACCA website and I do give links in my lecture notes to ACCA articles listing the formulas available etc..
As far as format marks are concerned, they are most for written parts of questions (especially for the report in question 1) and are for (in, for example the report) setting it out professionally. As far as spreadsheet answers are concerned they are simply for setting the workings out in a way that the marker can follow – for example when listing the cash flows for an NPV question that they are presented in columns with sufficient heading to make it clear for the marker what you are doing.
What you have written about the swap seems OK, but until I have seen the actual question (which will not be for a while) I cannot say anything with certainty.
Dear sir,
I have successfully passed my AFM exam. I passed it at 50.
However, I need your suggestions regarding time management in ACCA advance exams. Your precious suggestions will help me in future exams.
The biggest problem that I faced was understanding question scenarios. These are too lengthy scenarios. Even getting their point is very time consuming.Thank you for helping us in passing ACCA exams.
Congratulations on having passed Paper AFM – I am very pleased for you.
I agree that the scenarios are very lengthy and you are not alone in finding this a problem.
However, the style of questions is different in each of the other advanced exams and you would be better asking for advice from the relevant tutor in the Ask the Tutor Forum for whichever exam you are taking. For most of them our tutors have also uploaded some lectures working through a few past exam questions which are there to help with the approach to them.
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