consensus is that Eco is usually abt 5% of the exam. So how much focus shud b put in it? I knw triangular arbitrage,foreign exchange is important. Besides this, does it really worth going through the rest of it, provided that there are so many other weak areas of mine where i need re-visit??
Foreign currecny translation seems to be the most of it, but I heard one year they didn’t even test it. They tested the Rule of 70, a one percent increase in the percentage of capital per hour of labor equals a 1/3% increase in labor productivity, holding technology constant. And tested on the Current/Capital accounts.
Reggie, That was last year, and I was thankful because I’m pretty sure I got 6/6. I’ve been told (by past test takers) that currency arbitrage is rarely tested in econ, and why would it be? With only 6 econ questions it seems silly to waste them on something that really belongs in derivatives. No gurantees of course… So glad I never have to study that stuff again.
I think the econ material is pretty interesting and not a hard read.
There was a thread a while back where someone had put together the weightings of the exam for the last 5 years. I seem to remember that the CFAI has never changed the weightings of any topic area during that time.
yeah it’s not hard but still a little time consuming. Yup saw tht % breakdown thread. Econ has been 5% only. But well no guarantee they feel different this yr n make it 10%!! It is so hard to decide what to focus on now :-/
i enjoy it and can see some easily tested material that at the same time can send you into a spin on the best of days. cross rates - the 2 formula’s 1/3 rule rule of 72 (rule of 70 but 72 is more exact) growth theories - classical, neo-classical, NGT know direct/indirect know your parity formula’s - real rates are equal, inflation diff approx= nominal IR diff BOP and effects of MP and FP i think that’s about it for the majority stay away from forward bid-ask spreads.
I was really upset they didn’t test FX last year. I can usually manipulate the parity formulas to get an answer but all this other stuff, forget about it.