Portfolio, eco, quant.

CFA Level I
#1

How did everyone do on their portfolio mgmt, eco and quant/; Can we use this to iron out details of what everyone found difficult in those sections so that we atleast know how many qts each of us screwed up. For starts, does anyone remember the correlation and explained variance qt? Also, what about USD vs Japanese Yen qt?

#2

can’t talk about exam questions on here.

#3

It was 2.714% premium

#4

Actually, I think it was a 2.714 discount. They worded it in a way that was tricky…the forward rate was higher than the spot rate, but they asked about how the foreign was traded with respect to the domestic…which means you flip it. Anyone else verify?

#5

think i determined discount also

#6

me too.

#7

Any idea about the New Keynesian ?

#8

adb258 Wrote: ------------------------------------------------------- > Any idea about the New Keynesian ? beleive something to do wuith expectations was the answer

#9

your right TheDubs, it was expectations

#10

Smarshy Wrote: ------------------------------------------------------- > Actually, I think it was a 2.714 discount. They > worded it in a way that was tricky…the forward > rate was higher than the spot rate, but they asked > about how the foreign was traded with respect to > the domestic…which means you flip it. > > Anyone else verify? —actually it should be the 4. something % discount, cos it’s a 3 month forward and you annualize it to 1 yr (360 days), I found this error when I was checking my answers after I finished

#11

wait, am I talking about the same question…?..hmmm…

#12

There was also something on agg demand and real GDP. Does anyone remember?

#13

there was also something on the board of directors about take overs believe.

#14

i cant remember if it was discount or premium…i just remember that you have to flip it.

#15

I thought the afternoon section for quant and eco was harder than morning section… also, I found afternoon ethics section easier than morning.

#16

WTF, the foreign currency is trading at a forward premium.

#17

i found both econ sessions very easy

#18

LongOnCFA Wrote: ------------------------------------------------------- > i cant remember if it was discount or premium…i > just remember that you have to flip it. —ya, I think, if my memory is correct, they quoted in indirect quote, but ask what is the foreign currency trading at, so you have to flip them, or the other way around

#19

any difficult qts on econ? there was something with agg demand and real gdp… can’t remember

#20

I don’t remember the question on the exam, but I’ve noticed that people here get way too confused as to whether something is trading at a forward premium or discount. I think the problem comes from relying too much on the equation. What I find to work 100% of the time is to just use the equation (remembering to annualize) to determine the absolute value (as a %) of the difference between the forward and spot rate. Then, just look at the rates and determine rationally which is trading at premium/discount. For instance, if spot rate for GBP/USD is 1.24 and the forward rate is 1.256, just think about what that means. Forget the formula. Just look at in terms of “how much of currency A do I get per currency B?” If I trade in the spot rate, I get 1.24 pounds per dollar. If I trade in the forward rate, that one dollar actually goes farther and gets me 1.256 pounds. Hence, the dollar must be trading at a premium.