Dear all, I found currency problems are very tricy and confusing, if some one could clarify my confusion, much appreciation is awarded. how come AUD : MXN=MXN/AUD? in my point of view, AUD:MXN should be AUD/MXN since it’s a : and how do I know when to multiply and when to divide? Bit of silly question but if you could help me understand, it’d make my life easier.
it’s just the presentation convention you quote from the base currency point of view base currency :countercurrency is the same as counter / base -------------------------- it depends on what u are looking and what is given to you. u just gotta arrange it algebraically. if u wanna convert to GBP and given values for and GBP/ *(GBP/) = GBP the dollar signs cancels out. if u wanna convert to GBP and given values for and /GBP \*(1/(/GBP) = (GBP/) = GBP
Check CFAi Volume 1, page 551, right above Direct and Indirect Quotations MXN/AUD indicates how much MXN are per AUD 1 , the quoted currency is AUD AUD:MXN indicates the price of AUD 1, expressed in terms of MXN, the quoted currency is AUD There is no difference, MXN/AUD = AUD:MXN. Most probably the second notation will be used in the exam. Learn how to use it in the next couple of pages (552-553).
It’s just the convention that u have to follow. AUD:MXN = no. of Mexican pesos for 1 Aussie dollar = MXN/AUD
Just forget about this notation MXN/AUD, this ain’t exist no more. Writing Fx Quotes in base: counter (ex AUD : MXN) is the new "IN’ and will also help you pass L2
not if you are using either Stalla or Schweser. They throw in plenty of questions with both types of conventions. So does the CFAI text as well… All in all, a very painful experience with FX… esp because of the difference of the convention.
Even in the CFAi text there are ref. to both notations. Check problem 18 on page 572 volume 1. I’m used to the “/” too, so each time I see a question using “:” i write the “/” quotation for it. Much simpler (visually, when you multiply or divide in cross exchange). Works.