Yes silly me. You have it correct. Too much coffee today.
Hey Marc-
Is there a good way to try to memorize/get down the currency swap.
Sometimes hard to see for me if it is asking for measuring the credit risk, (SFFD) or if it’s asking on the different payments when you’re concerting a loan in one currency to another. (Walmart to GEB)
Thanks
Simple question Marc, is it necessary to write down all the inputs in a TVM calculation or any calculation than is done thru the calculator? Thanks in advance
Hey back,
Never memorize, not a good idea for Level III. There are many aspects of the currency swap so the dynamics can change based on the question the exam asks. Is the bond better issued as in the Royal Tech section 3.1 in the swap reading 3.1. It can also be converting foreign cash receipts and payments into the domestic currency in section 3.2 with Colorama Software. You can even manage the risk of a duel currency bonds as they did in section 3.3. There is only three circumstances they ask about currency swaps in the swap reading.
The “credit risk” of a forward contract is easy when you use SFFD . Try the technique with Bluebox 8 in Reading 31, page 177 and 178.
If the question states “Show your calculations,” then ABSOLUTELY yes. If you simply provide your 4.5% solution for a 5 point problem the grader doesn’t know how you arrived at your solution, either by the four other inputs or by a look at your neighbor’s paper. Give them your inputs. If you make an error then you lose only one point as well and not the input plus the solution there is no double jeopardy. If you only provide the 4.5% for a five point question you will loose the other 4 because they asked to show your calculations. Answer the question they ask 
Overall MPS prediction? We were looking at the percentile ranks for the 2018 exam and it looks like ~68% for the AM and well above 70% - maybe closer to 80% for the PM. What would you consider a “safe” score?
I’m not sure how you derive that information. It rolls like this…after the exam is graded (not before) the senior grader is asked what is a MPS on each specific question they were responsible for in the grading process. Once they determine each questions MPS, they then aggregate the scores across all questions on the exam. Thusly a 10 point question MPS can be 4 points if it was a very hard question.
The CFA Institute has said any candidate scoring above 70% has passed the exam. That is printed and verified.
Hey Marc,
I’ve managed to go over the Focus Book, Core Curriculum Book, Old Exam Binder, and IPS workbook 2x each since attending your bootcamp a month ago!
I’m not sure if I’ll have enough time in the next 1.5 weeks to do another round of everything… But would you recommend I just go through the Core Curriculum book (and its relevant Blue Boxes) for the next week? or should I spend some time to redo the online Practice Questions (i’ve only done them once so far…)?
Also, regardless if I pass or not this year. Just wanted to thank you for your help! I’ve been taking another prep course for L3 prior to attending your bootcamp, and had the original intention of attending your bootcamp *only* for the IPS/Exam Strategy workshop. Well, you’ve completely changed the way of how I should approach this exam post-bootcamp, and the notes of my other prep provider had been collecting dust since then!
That looks more like 90th percentile than MPS
Yup great job with the material Marc. This year so much more confident. All the mistakes at least this year. I know where exactly to find the answers from the curriculum/slidebook so there are no more hidden surprises.
For the intensive boot camp before the exam what will you have your candidates doing that week? Just mainly questions from the old exam binder?
Thanks
When we show calculations, do we have to label what we are doing, or can we assume the grader can follow along?
Example: portfolio is $1 M, and the person needs to spend $500k in a few days, and you want to calculate the portfolio value next year as an input to calculate next year’s return. They need $100k for next year.
1,000,000 - 500,000 = 500,000
100,000/500,000 = 20%
OR
Portfolio value next year: 1,000,000 - 500,000 = 500,000
Needs next year: 100,000
next year’s return requirement: 100,000/500,000 = 20%
Great work, that is solid. You will have no surprises on exam day. Speed is always an issue. Focus on your rough spots and make those your crushing topics. Keep reviewing the slide book and whichever questions you struggled with.
I’m glad you saw there is much more to how I cna help vs just the IPS return calc ;-)) Send me your positive outcome results!
I want to work old exam problems and demonstrate how to answer the questions base don the points awarded and how to do so with less words/verbiage. Once we have done a topic of exams switch to Blueboxes. I am also going to have the candidate verbally explain how they answered the questions and have them simplify the approach they used to solve the problems. They are also presenting at random times a ethics substandard they have been assigned (along with the associated questions at the back of Volume 1). After the Blueboxes we will hit the white text. IPS twice. Over the course of the 8 days I want to hit Individual, Institutional and BF twice hard before the exam
Just label your solution, especially if they ask for it in a particular form such as basis points. Intermediate labeling isn’t necessary it only burns up time and won’t earn points.
Yes, I meant to say that was the 90th percentile. Not the MPS. Didn’t mean to freak people out 
lol too late hahaha
Hi Marc,
thumbs up for the Boston Bootcamp. Certainly recommend it.
I have a hard time understanding the following EOC q: (on one hand the text states trades should be assessed on hedged returns but then the answer states it doesnt matter if hedged or not to evaluate attractiveness)
Regarding inter-market trades in general her notes indicate:
Inter-market trades should be assessed based on currency-hedged returns.
Anticipated changes in yield spreads are the primary driver of inter-market trades.
Whether a bond offers a relatively attractive return depends on both the portfolio’s base currency and the currency in which the bond is denominated.
Which of Winslow’s statements about inter-market trades is incorrect?
Statement IV
Statement V
Statement VI
C is correct. Winslow’s Statement VI is incorrect. Due to covered interest arbitrage, the relative attractiveness of bonds does not depend on the currency into which they are hedged for comparison. Hence, the ranking of bonds does not depend on the base currency of the portfolio.
The context matters from which the question is posed. There is uncovered IRP and covered IRP. Uncovered means the currency exposure is unhedged, once hedged it becomes covered IRP once the forward currency contract is introduced.
The primary driver of intermarket trades is a view on narrowing or widening of yield spreads (Reading 24, section 5, third paragraph).
Bluebox 4 reflects this approach.
Intermarket positioning in BBox 5 has a unique proposition. That is that the manager has an existing portfolio of bonds from UK, Germany and the US. The manager is constrained by no short selling, buying and selling bonds with a limit of 1.0mm and duration neutral. In this context they said the trades had to be evaluated after the return is converted back to the local currency.
Maybe this was confusing with your interpretation of the EOC. I hope this helped.
Thanks everyone, this was fun. I though it would be harder;-))
As in any worthwhile journey in life, it is the work that you put into the process that makes the result so valuable. I know you are all ready to rock the exam and I hope everyone of you passes. No one should have to take the Level III exam more than once, thus I pray you make it “One & Done”.
One bit of advice…don’t get medical advice from any one other than a licensed medical doctor. Don’t get legal advice from anyone but a licensed attorney and don’t climb Mount Everest without the best Sherpa you can hire Lastly, on your last leg of the CFA journey find the best instructor you can to help you make it One & Done and that they have the CFA designation.
Best of luck to you all!