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Hello tutor,
I need help in understanding the answer for June 2008 Q3 a.
I have no idea what are they explaining. I mean, it is about money market hedge.
How did they get the interest rate 2.13% in Note 2 explanation.Format given is… 1.6199 which is the spot rate in 2 months.
1.6199 = 1.6244 (no idea where it is from) x (1+ ic x 2/12)
÷(1 + 0.0375238 x2/12)Been working on it for an hour. No good.
What are the sittings best to practise since the examiner been changed? I read the previous prize winner’s comments. He said Dec 2002 till June 2007 which are not on ACCA’S website.
Sorry for too many questions but I need help. Thank you.
Same sitting on Q5…the answer for part a.
New capital introduced $816.32. Where is this amount from?
This whole sitting makes me think that the examiner’s answers are all wrong….sort of lol
First question:
This is a question from the previous examiner, and he was dreadful (which is why he is no longer the examiner 🙂 )
He has used the interest rate parity formula (on the formula sheet) which determines the forward rates by comparison of the interest rates.
The 1.6199 is the average of the forward rates in 1 month and 3 months ((1.6223 + 1.6176) / 2)
The 1.6244 is an error – it should read 1.6242, which is the current spot rate.
Now (I hope) it will make sense!
The questions that were set before the previous examiner took over (i.e before 2002) are worth working through. They are no longer on the ACCA’s website, but you must get a Revision/Exam Kit from one of the ACCA approved publishers, and they will be in there.
Second question (I will answer you, but when it is a different question, please start a new thread in future):
Sorry (although it is not my fault!) but the examiners answer is completely ridiculous.
The NPV if all equity financed is $45.9M
The PV of the tax shield is $67.06M
The transaction costs are $16.33MSo the APV should be $96.63M
I really think you should avoid the questions set by the previous examiner – the above rather explains why 🙂
Thank u so much sir,
Really makes sense now after ur explanations. Didn’t wanna burden my ubby to spend anymore. That is why I have not been going for any classes. Just following opentuition. He is a sole earner. Even my exam fees are paid partly by my parents and hubby.
I couldn’t get a job in south africa coz I’m a foreigner. I must just find my way now if I want to succeed. Thank u again sir
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When did the current examiner take over??have you read the technical article interest rate risk management??someone explain to me the swap part..
I read tech article still the swap part not digesting at all. Anyway, I’m gonna practice OT’s revision notes. Hopefully, everything stays in my brain
Oh yeah…if I’m not wrong, the current examiner is from Dec 2010 till now. Is this correct, tutor sir?
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