# Two questions...

Hey guys, 1. A friend of mine had said that the L2 ethics portion questions require you to memorize the numbers of the standards - for instance, IIB, IIIA etc, because you would get questions that specifically refer only to the number and not what the standard is. However all CFAI and Schweser mock questions don’t seem to do this and I’ve been doing fine on ethics overall - should I memorize the numbers? 2. For formulas that use domestic/foreign rates/currencies, is there a surefire way to know which rate/currency is domestic and which is foreign? For example, FCRP, IRP, RPP, etc.This messes me up from time to time. Thanks!

1. don’t have to “Standard 2A, 3B” etc, by title 2. /Yen --\> is the domestic currency, Yen the foreign currency
1. No, you don’t have to memorize the numbers of the standards. 2. Just remember that the base currency is always represented in the denominator…with the exception of calculating the change in the real exchange rate (PM section). This also had me confused for a while, until it all became clear. :EUR = is base currency \$/EUR = EUR is base currency

:EUR mean "euros per dollar" ----- is that correct? same as E/

Your first question, Yes Your second question,…EUR/ means euros per dollar A slash means that the is the base A colon means that the EUR is the base And any time the question says “per” currency, that following “per” currency is the base

: equals in / equals per

dapoopa Wrote: ------------------------------------------------------- > 1. No, you don’t have to memorize the numbers of > the standards. > > 2. Just remember that the base currency is always > represented in the denominator…with the > exception of calculating the change in the real > exchange rate (PM section). This also had me > confused for a while, until it all became clear. > > :EUR = is base currency > > /EUR = EUR is base currency For :EUR wouldn’t EUR be the domestic currency? And for /EUR it would be ?

The domestic currency is whoever the investor is. You cant assume that you are given a direct quote and then the quote on top is the domestic currency. If they give you an indirect quote you have to take the inverse is order to get the domestic currency in the numerator.

justinkc Wrote: ------------------------------------------------------- > The domestic currency is whoever the investor is. > You cant assume that you are given a direct quote > and then the quote on top is the domestic > currency. If they give you an indirect quote you > have to take the inverse is order to get the > domestic currency in the numerator. This is what I was suspecting - so if this is the case then, how do you know for sure who the investor is? It’s not really clear in some of the questions

I’m with brafique and Justin! Good Night !

I think this confusion/trick only comes up with FCRP, and then they have to tell you from what perspective. If its just a future price question is doesn’t matter you just multiply across by whatever the currencies are.