# Online Sample # 3, question 17

For this question… where did the 1.8 come from? you needed it to determine the “Expected Appreciation/Depreciation” and then subtract the forward premium/discount to see if we needed to hedge I was using the “forecasted rate” supplied (I think it was 1.6?) and subbing it into the formula below… However the answer used “1.8”-1.84/1.84 I was just wondering? was the 1.8 given in the question?

I belive this 1.8 was the calculated forward price if my memory is good.

I remember calculating it on the exam, but, I couldn’t get the number (1.8) I used the respective interest rates. Unfortunately, the answer sheet doesn’t provide the calculation for how 1.8 was attained the forecasted value they had for the forward rate was 1.6 if I remember correctly? I know we needed to determine our expectations of what we expected the currency to do…but, I can’t recall the way they reached it… please anyone?

bump one last try?

Just finished the sample test, one word, rough! The 1.8 was provided. It was the firm’s forecasted rate.

Thanks!!! I got it wrong, but, at least I know what I was looking for. was it provided in the question or in the chart. I was looking for it in the chart but, I didn’t see it?

It was in the chart along with the spot rates and corresponding interest rates per coutnry.

How did you do on the test almo?

It was rough, for me as well, I have to admit I did poorly. I found the wording very confusing! I think it’s the hardest of the online exams.

Have you done all of the samples as well as the mock? Do you mind posting how you did? Just looking for a benchmark for comparison of exam difficulty level. Thanks.

No prob, my lowest was in the low 60’s but avg on everything to date is in and around 70’s btw, that question, (based on what I remembered) had a forecasted of 1.6?? do you remember seeing that figure at all? I hope I didn’t misread that, I hope that wasn’t suppose to be the 1.8! I think I misread the forecasted colomn wrong? I could swear I saw1.6 under forecasted…guess it’s time for new glasses…

Pretty sure it was 1.8. I had written it down on some scrap paper as I was working through the problem.

gosh darn it!

it’s 1.6, I had exactly the same question, I even thought about reporting errata but how can I prove myself right? I didn’t want to screenshot so I violate the rules but I can guarantee you that forecast was 1.6 and there was no 1.8 at all.

it’s 1.6 Euro Zone forecast 1.1, which is 8% down, my answer was should hedge both!!!

Just finished this one. Absolutely brutal. My notes say “1.813 \$/pd vs forecast 1.8 --> hedge” so I’m pretty sure they gave us the 1.8. maybe they had errata and have changed it?