Reading 21 - Currency management

Hi all,

Really struggling with the content of Reading 21. Any tips on how to tackle it?

I find the issues hard eg. which side of bid/ask to use and roll yield hedging. I watched the schweser videos as well.

Should I just focus on questions and understanding concepts to beat it?

Thanks in advance

For bid/ask: this is the same buying/selling for securities. The larger number is used to buy and the smaller is used to sell. If it was the other way, you’d have arbitrage.

The other confusion is to make sure to buy/sell in terms of the base currency (price/base). Buying the base is the same thing as selling the price. selling the base is the same as buying the price.