Currency Exchange Rates: Understanding Equilibrium Value (2024 Level II CFA® Exam-Economics-Module1)

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Topic 3 - Economics
Module 1 - Currency Exchange Rates: Understanding Equilibrium Value
0:00 Introduction and Learning Outcome Statements
6:30 LOS: Calculate and interpret the bid-offer spread on a spot or forward currency quotation and describe the factors that affect the bid-offer spread.
10:23 LOS: Identify a triangular arbitrage opportunity and calculate the profit, given the bid-offer quotations for three currencies.
18:05 LOS: Distinguish between spot and forward rates and calculate the forward premium/discount for a given currency.
26:40 LOS: Calculate the mark-to-market value of a forward contract.
30:47 LOS: Explain international parity conditions (covered and uncovered interest parity, forward rate parity, purchasing power parity, and the international Fisher effect).
42:21 LOS: Describe the relations among the international parity conditions.
46:17 LOS: Evaluate the use of the current spot rate, the forward rate, purchasing power parity, and uncovered interest parity to forecast future spot exchange rates.
LOS: Explain approaches to assessing the long-run fair values of an exchange rate.
48:13 LOS: Describe the carry trade and its relation to uncovered interest rate parity and calculate the profit from the carry trade.
51:56 LOS: Explain how flows in the balance of payment accounts affect currency exchange rates.
57:20 LOS: Explain the potential effects of monetary and fiscal policy on exchange rates.
1:04:13 LOS: Describe objectives of the central bank or government intervention and capital controls and describe the effectiveness of the intervention and capital controls.
1:08:33 LOS: Describe warning signs of a currency crisis.

Пікірлер: 16

@Music4LifeNFun 2 жыл бұрын

I just want to thank Analyst Prep and James Forjan for posting all this quality content. Great material. Very well explained. This reading is a tricky one.

@minecraftender02 Ай бұрын

god bless the work you do for us

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@kavyaverma9221 2 жыл бұрын

This video literally saved my day.......Extremely well explained!!

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@damisiayoola4362 2 жыл бұрын

Thanks Prof for the awesome support. one quick clarification on slide number 10, the dealer bid was higher than the Implied interbank cross rate which seems to be in contrary to the summary on 7

@lovish2728 Жыл бұрын

At time period 44:20 under international parity conditions, there seems to be a redundancy in point 2 and point 4. Professor can you help explain the same

@supasetsothonsirimongkol9328 2 жыл бұрын

Confuse why large inflow into EM market leads to or link to a great debt buiding up because i think if country has accumulated more debt then its domestic currency will be depre not appre but the inflow will make its domestic to be appre, please help to expaln professor james. Thank you

@tolue 3 ай бұрын

At around 15:45, are the CAD/USD offer and bid prices switched? Is this because of the direction of the arbitrage? Any help would be appreciated

@theaj1nkya 9 ай бұрын

Many thanks for the presentation. A question: 30:30 : Why are we taking the Forward Bid Price when we are long the base currency? Shouldn't it be the Forward Offer/Ask Price?

@theaj1nkya 9 ай бұрын

Got it. It's because MTM is the cost of close and for close out you have to look at the offsetting transaction.

@danielbelotto6728 Жыл бұрын

At 7:52 the slide says that 'Larger spreads for larger, liquidity-demanding transactions' but the professor says the inverse. Can someone help me find out which one is correct?

@theaj1nkya 9 ай бұрын

I think he said if you trade a million and a 100 you will have a larger spread for 100 (100 million)... although the 100 can be interpreted as 100 dollars, I think it was intended as 100 million and yes, larger sizes imply larger spreads in general.