FM*** March 2023 ACCA FM exam – Instant Poll and comments ***

I think it was 33.7 but I’m sure I just divided by 6 month forward rate and left it there. Maybe I made a maths error or maybe it was 33.2

Leading and hedging answers please? What did you choose for purchase power parity and currency devalue?

I don’t remember leading and money market hedge. I need to try to write them down. Give me some time.

Could you help me to remember? So with lead payment, the spot rate was 50? 1800/50=36m but then we need to borrow this at what rate? 5%? 36*1.05=37.8? I’m really not sure. I can’t remember Money market hedge figures at all.

I think the spot rate was 50.5. Do you remember the question regarding purchase parity power and curreny devalue due to import?

Spot rate was $1 50 - 50.5 pesos since we were buying pesos we should have used 50. No?

Did anyone have question regarding contractionary fiscal policy and expansionary monetry policy. Was the answer goverment expenditure decrease and money supply increase?

When we buy we use the one with greater amount

Yes, i got the same paper aswell, the question about floor value absolutely threw me off. Does anyone remember the value of NPV? and for the second part of question which variables of the sensitivity analysis is the right answer?

I don’t think that’s correct. But monetary and fiscal policy I answered the same. In expansionary monetary policy money supply increases and in contractionary fiscal policy gov spending decreases.

I don’t remember purchase power parity and devalue question. I mean I remember something, but not entirely

I put 33.7 as this is a higher value and we are finding the payment amount. The company had to pay 500k more… I hope that makes sense

Bank can't profit if they sell on low price and buy on high price. So when we sell they charge low price and when we buy the charge high price.

Singh you are right but I choose 33.2 which is incorrect. What were lead and money market hedge answer?

Ah yes S1ngh that makes sense. saulatr When we buy pesos with dollars we have to pay more in dollars as the bank will profit. 1800/50.5=35.6 vs 1800/50=36 so it’s 36 that we need to pay. If we were buying dollars with 1800 pesos we had, the the bank would have paid us 35.6 dollars.

Ok. Singh do you remember last question for working capital?

What was the last question with risk mangement?

And also the question which have the option of repurchasing stock increase marketibility

Anyone with the npv question of 6 marks Sales units i gues 145 or 245 units, tax 26% in arrears, initial investment i guess 1.5m I really dont know if we needed to incorporate tax or not as many students told me they got a npv question without tax.. Plz guide how did you solve it?

I think there were different tests, I had to calculate NPV without tax, without tad, without inflation, just with sales, variable costs and attributable to project fixed costs, initial investment refundable at the end of investment period and cost of machine with residual value, second question to that was to calculate sensitivity to sales volume.

How did you find this question? I had no idea what do to in that second part.

What do you mean by initial investment refundable? I had the same question. I didnt see that anywhere. There was surely residual value. There was no tad but was tax in arrears

The question stated that you had a machine costing $400,000 with residual value in year four don't remember now if it was 100 or thereabouts and it also stated that investment required initial investment of $75000 that will be recovered in full in year 4. In my question there was definitely no tax in arrears, it actually stated ignore taxation. Discount factor 12% I sat my exam in the morning. The nvp was calculated on new investment where sales were estimated for four years and was meant to fully stop in year 4. I did have a similar npv question in section a or b where there was tax payable in arrears.

I feel we had different papers mate. Lets hope all of us make it through…. Best of luck

It had to do something with netting external or imperfect hedge something. I chose that option coz others looked wrong to me

Good luck to you too:)

Does anyone remember having a question regarding agency?