Portfolio, eco, quant.

4% Discount, foreign was a premium; then ya had to annualize it…

Aspiring Analyst Wrote: ------------------------------------------------------- > 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. —that’s the approach I use too and it always work, but I think what people usually mix up with is which currency is the premium/discount for…

Liabba. I don’t think they asked for the annualized premium/discount, and my understanding is that you provide the absolute unless asked specifically to provide annualized.

it did ask for annualized. i remember that.

was the answer for agg demand question as A i.e. real GDP?

thats what i got adb258

Crap. If it said it, I must have provided it, I don’t think I would have missed that. The truly infuriating thing is, I’ll never know.

I like your username – LongOnCFA :slight_smile: Though don’t know if thats an ethics violation :slight_smile:

There was something on import and expected future income… does neone remember?

how about short on CFA? because i would regard it overvalued by the sheer number of people i saw taking it forcing the value down.

Anyone remember the correlation and unexplained variation question?

yep. R^2 was >0 but <1,so corr. coeff is > coeff of determination.

so the independent variable explains less than 50% of the variability in y? That’s what I put.

not sure if that was being asked on this question.i thought it was the relation between rho and R^2 when indep variable doesnt explain 100% of the variability.

I agree lola. You took the square root of R^2, i think i ended up with around 43%. Looking good!

i agree with dsylexic (by the way, i just caught the genius of your name while typing it out)…it was asking something else and i wound up putting that it’s less than the correlation coefficient. i remember reading it over and over because it seemed too easy, but c’est la vie. we’ll never know.

z3159712 Wrote: ------------------------------------------------------- > how about short on CFA? because i would regard it > overvalued by the sheer number of people i saw > taking it forcing the value down. lol, I like that. OR you can argue that precisely because the charter is so ubiquitous now, there will be an even higher demand for it, considering that it’s now another hoop everyone has to jump through to remain competitive. Depends on how you look at it.

dennis2085 Wrote: ------------------------------------------------------- > i agree with dsylexic (by the way, i just caught > the genius of your name while typing it out)…it > was asking something else and i wound up putting > that it’s less than the correlation coefficient. > i remember reading it over and over because it > seemed too easy, but c’est la vie. we’ll never > know. We’re probably talking about different questions then, because the one I’m referring to was definitely asking that.

corr. coeff is > coeff of determination is what I remember putting in too… I guess from the posts, I got that one wrong as well :frowning:

lola Wrote: ------------------------------------------------------- > dennis2085 Wrote: > -------------------------------------------------- > ----- > > i agree with dsylexic (by the way, i just > caught > > the genius of your name while typing it > out)…it > > was asking something else and i wound up > putting > > that it’s less than the correlation coefficient. > > > i remember reading it over and over because it > > seemed too easy, but c’est la vie. we’ll never > > know. > > We’re probably talking about different questions > then, because the one I’m referring to was > definitely asking that. No, that was correct. Coefficient of determination is the square of the correlation coefficient. if the correlation coefficient is <1, then the correlation coefficient > coeff. of determination