Reading 30: Page 376 Text Example Seems WRONG

Here’s why.

Spot Rate: 0.825 CAD/Euro

Euro interest rate 4% CAD interest rate 5%

Implied Forward Rate: 1.05/1.04 * .825 CAD/Euro = .817 CAD/Euro

10 MM Euro = 8.17 MM CAD

How doe the book get to CAD 10.3125

Insert headscratch emoji here. ANYBODY!?


I haven’t the 2018 curriculum yet; what’s the title of the reading?

CAD/EURO ==> look at the CFA convention.

1 CAD= 0.825 EURO

So 10/0.825 M CAD would be the equivalent of 10 M Euro…

Direct vs indirect quotes drive me nuts. They switch them up on the same ticker on Bloomberg tv. I’m so used to CFAI using indirect quotes where it’d have been CAD over EUR. I’m doing CIPM now where they’ll toggle between both in same item set.