• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
Free ACCA & CIMA online courses from OpenTuition

Free ACCA & CIMA online courses from OpenTuition

Free Notes, Lectures, Tests and Forums for ACCA and CIMA exams

  • ACCA
  • CIMA
  • FIA
  • OBU
  • Books
  • Forums
  • Ask AI
  • Search
  • Register
  • Login
  • ACCA Forums
  • Ask ACCA Tutor
  • FIA Forums
  • CIMA Forums
  • OBU Forums
  • Qualified Members forum
  • Buy/Sell Books
  • All Forums
  • Latest Topics

20% off ACCA & CIMA Books

OpenTuition recommends the new interactive BPP books for June 2026 exams.
Get your discount code >>

Error in Pilot Paper Q2

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA AFM Exams › Error in Pilot Paper Q2

  • This topic has 1 reply, 2 voices, and was last updated 15 years ago by John Moffat.
Viewing 2 posts - 1 through 2 (of 2 total)
  • Author
    Posts
  • June 3, 2010 at 4:55 pm #44385
    zigot14
    Member
    • Topics: 6
    • Replies: 20
    • ☆

    I’ve been cracking my head over this question and i think there are 2 mistakes to it.

    Firstly,
    “EUR 0.6900 to the pound” means 1GBP = 0.6900EU, according to the suggested answer. This sounds correct if you intepret it in language terms. “to the pound” means 1 pound. Hence 1GBP = EU0.6900.

    However, this is quite strange because Bob Ryan, the examiner, always uses real life scenarios. So implying that the EU is stronger than GBP is inaccurate.

    —-
    Second error in the question is the calculation of the forward rate using IRP formula. The formula is

    Spot rate(indirect) X (1+ic)/(1+ib)
    where
    ic= interest rate in counter/home current country, i.e in this case should be UK’s interest rate as this is indirect quote. But the suggested answer puts ic as the EU interest rate.
    ib= hence should be EU’s interest rate, i.e. the base/foreign currency, but the suggested answer puts it as UK’s.

    Are the above errors?

    Thanks for the time

    June 4, 2010 at 3:03 pm #62004
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54835
    • ☆☆☆☆☆

    You are correct – the two things go together, but certainly he has dealt with the exchange rate the wrong way round.

  • Author
    Posts
Viewing 2 posts - 1 through 2 (of 2 total)
  • You must be logged in to reply to this topic.
Log In

Primary Sidebar

ACCA News:

ACCA My Exam Performance for non-variant

Applied Skills exams is available NOW

ACCA Options:  “Read the Mind of the Marker” articles

Subscribe to ACCA’s Student Accountant Direct

ACCA CBE Exams – Instant Poll

How was your exam, and what was the exam result?

BT CBE exam was.. | MA CBE exam was..
FA CBE exam was.. | LW CBE exam was..

Donate

If you have benefited from OpenTuition please donate.

PQ Magazine

Latest Comments

  • Aiko on ACCA TX-UK FA2025 Chapter 2 The Income Tax Computation
  • aesya on FA Chapter 10 Questions Books of Prime Entry
  • Emelyn on Conceptual Framework – ACCA SBR lecture
  • John Moffat on Discounted cash flow techniques (part 1) – ACCA (AFM) lectures
  • lokeshdh00 on Discounted cash flow techniques (part 1) – ACCA (AFM) lectures

Copyright © 2026 · Support · Contact · Advertising · OpenLicense · About · Sitemap · Comments · Log in