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Hi all
I am currently studying for F7 for Dec 2010 exam. When studying, I came across stuffs like calculating discount interest (interest rate of 10% over 5 years) and the many different financial instruments and hedging accounting.
I have no clue how to calculate discount interest and no background whatsoever on the financial instruments, and how to calculate them ( e.g. loan $157,763 at 4% interest rate, required to repay $200,000 in 5 yrs — how do you arrive at effective interest rate 9.5%?). Pretty sure these weren’t covered in the earlier papers.
Hence I’m asking for help. Is there a good introductory book for such topics? I don’t even know where to begin to search, are these topics considered as economics? or accounting?
It’d would be a great help if you could share with me how you yourself get knowledge of such things. Because all of the things I mention are assumed that you know in the textbooks and I’m having a hard time grasping the calculations and understanding the financial instruments.
Thank you in advance.
KaitlynDo you have any idea about discounting? If you dont have than download the F9 opentuition course note and read chapter 8 then download the F7 opentuition course note and try to study chapter 16 & 17. You should also read the relevant topics in your study text too. Hope this helps….:)
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