AFM*** P4 December 2012 Exam *** Instant Poll and comments***

AAAAHhhhhhh what the hell paper was about ,,,No Apv,no proper risk management,no mergers and acq ,no black scholes nO nO NO nO ,why examiner does this?

Ahtasham, I agree. I knew lots on risk management, apv, Eva, bsop and none of it came up. Even the fx question was really strange, so I'm gutted really

Did any one answer Q5, IMF?
IMF is international financial institution
IMF support countries BoP problems
Countries have to implement structural adjustment program
SAP policies entail cutting current account spending
These policies negatively impact population as, salaries of govenment workers are cut and taxes are raised
ETC ETC

@ahtasham said:
AAAAHhhhhhh what the hell paper was about ,,,No Apv,no proper risk management,no mergers and acq ,no black scholes nO nO NO nO ,why examiner does this?

so true I agree with u.No Mirr no apv,no black scholes :( what kinda paper was it?

Q 2 was on fx ? Or something else... I saw people talking about NPS for 4 years, but I remember that Q2 was on FX. Am i wrong? Pls help me out, I cannot sleep after this stange exam (which I will successfully fail)

how come there are some students poll P4 very easy ? extremely hard

How do we solve qns 2? Isn't it on fx? How then do we solve using interest rates? The 1st one we can use money market hedge by borrowing, converting and deposit. But how do we use the info on interest rates for forwards, future and option? Anyone can advise?

How was Beta after proposal suppose to be calculate. i think My calculation it wrong. :( . Please Tell. :(

ferrischan:
1. the interest rate base plus/minus for computing forward rate using formular that: S1 = S0 x (1 + hc) / (1 + hb)
2. Option: not need using interest rate because exercise price set at 142 already.
3. Money market hedge: we use last paragraph information about borrow interest rate and investment rate: i) borrow ZP140mil/(1+ interest rate for 3 month); ii) buy Euro; iii) invest Euro; iv) receive ZP140mil; v) pay principle and interest in ZP, total = ZP140mil; vi) withdraw Euro (principle and interest).
Noted: quoted interest rate is annually but we buy in three months => convert to 3 months.

sorry, 4 months. we hedge 4 months because there is an OTC not exchange traded => unstandardized, we can negotiate.

Hey this paper was harder I tell you and it was really time consuming paper. I hope to clear it by GOD'S Grace. I am really fade up. No matter how you prepare you get challenged. It is my only paper remaining. GOD HELP ME PLEASE

Thieuson. That was a nice one. I failed to use PPP to get the forward rate. For the option, how do we know the contract size and the basis risk to calculate the option? Thanks

Same here. Hope to clear by God's Grace

ferrischan: as said, it is OTC so have no contract size. i estimated premium by ZP140ml/142 x 7 = ZP6mil => Euro received = (ZP140 - ZP6)/142. we can use this way because we need not compute it exactly. You must solve an equation to get the premium amount if you want an exactly amount.

the hedging question was a tricky one...... i used the following way......
converted the amount after paying the premiun at spot rate 142.. and invested in home country France @1.2%. A loan was drawn in Zuhait which will actually be equal to 142m after 4 months to fulfil the contract.. Am i Right

the hedging question was a tricky one...... i used the following way......
converted the amount after paying the premiun at spot rate 142.. and invested in home country France @1.2%. A loan was drawn in Zuhait which will actually be equal to 142m after 4 months to fulfil the contract.. Am i Right

@theophilus1990 said:
Wat of q 4 which was talking abt mov but de investment was made at de start of de yr so we don't discount yr 1 but discount yr 2 with yr 1 discount factor. am I right

Hi i assumed that the year of investmest in project was year 1. and used the discount factor .901 to discount the first year investment....
What u did of part B and C... let me know..

When the results are out? I want to see if I scored mor than 30 marks :((

What books did you use for the exam? I had BPP and Kaplan, didn't help that much. Lots of text, lots of "baby examples", few exam examples. Why we are always tested on some well laborated problems, that are extremely time consuming in the exam, when we are provided with such learning materials? I feel that is a big GAP between the texts we are studying and the exam itself. As if we are preparing for something and get "surprised" with the questions in the exam...

I mean I see on other papers (P7) people saying: "the exam was fair, even if I pass it or not". I didn't see such comments here. Anyway, in defense of P4, is a much fair exam than P5.

Before the exam i did not have a good sleep, and i did not drink enough water. I feel i performed a bit slow, and left 10 marks not anawered, but still can hope to pass.

P4 pp....l any good sugesstions for F9 ... my only 3rd attempt paper this time

I think the exam was reasonable based on the syllabus. However, as I say each sitting, the time given is not realistic as we have to first understand the information given before we can "apply" the knowledge. ACCA in my opinion has to recognise that we are still Students studying for a professinal designation and as such will not be able to readily summarise info necessary under such time constrainsts. Hey, but that is just my opinion and I don't in anyway mean to under-rate us by saying we are still students.

I am feeling sad after knowing i can done much better with the questions. Did a lot of silly/careless mistake.
For Q1, if not mistaken, i need to use dividend growth model to find Ve, g = b x re. Didn't think of it in the exam. Sigh...
Really hope can pass this time, tired of exam. All the best, peoples!

Hi all, few things...

Q2 - I didn't think we were required to calc the MMH? I didn't think we were given the rate at which the co could invest/borrow in the foreign curr, only France? And the question did say only to recommend an alternative, not estimate? Hope I haven't lost marks here...

Q4 - for the 'simple' NPV calc, the investment stated immediately, so wasn't this T0. Meaning cashflows started from T4 and lasted 15 years til T17. Then you calculate annuity then take off the DF for T3? Can someone please confirm?

The BPP study guide has NOTHING to do with multi-period capital rationing in which is a bit of a joke, #justsayin

Anyone care to put my mind at ease?

Sorry, T3 to T17

The examiner for paper P4 should be fair to the students and i believe that the level of difficulty should be sane for ALL optional papers ( P4 to P7)

@shrops

You are right for question 2, it said calculate the two derivatives only and advise on the MMH (not calculate).

Can't help with Q4 unfortunately, I did Q5.

Good luck everyone!