This topic has a low weighting on the exam (5-10) but it is killing me in the practice exams. Does someone have a ‘Basics of Economics for CFA Level II’ in a few lines for me? :slight_smile: When I review it in Schweser everything is in a logical order and answering the questions is easy. In the practice exams the logical order isn’t there and I never know what they are getting at. Do I have to use the real interest rates, inflation rates or nominal rates to calculate the exchange rate x years from now? When do I need to correct for the price basket? Just a basic rant after completely ruining Economics in a practice exam which was truly detrimental to my score. I also missed a vital piece of information. Didn’t even see it when I checked the answers where they suddenly got that info from. Reread it three times and was still clueless to where they got it from. Must be because it’s 2am on a freaking Saturday now. Sigh.

am in the same boat … sigh…everything get mixed up…fisher…cover…uncovered…IRP wat not…got a 33% on sample…by far my worst area…

I know what you guys mean, here is a quick run down of what I think is key to get you at least a 3/6 on vignettes. F = S0 (1+RDC/ 1+ RFC)

Thanks. I just have problems understanding when they want to know what method. :frowning: Since on the outset it looks really easy. Real interest rates higher? Currency must appreciate. Inflation higher? Currency must depreciate. Somehow when doing the questions that is never really that clear anymore.