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Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA AFM Exams › Casasophia June 2011
Sir,
In part b of the question, I used the PPP to forecast the forward rates and when I checked the answer, the tutor used the Interest parity but we got the same cash flow forecast.
Kindly explain if what I did was okay. Thanks
Not really.
PPP is used to forecast future spot rates, but forward rates are determined using interest rate parity.
Thanks so much. I wish I invite you for a dinner when I pass P4?
I will look forward to it 🙂