Level 1 CFA Economics: Currency Exchange Rates-Lecture 1

This is Reading 18 for the 2021 exam.

This CFA exam prep video lecture covers:
The foreign exchange market
Nominal and real exchange rates
Examples

[timetostudy]

For someone who doesn’t understand the conversion at 3.35. USD/EUR=1.3 to 1.4 =>1 EUR = 1.4000 USD so if you have 2 EUR in the case USD/EUR = 1.3000 you can only purchase 2.600 USD, while USD/ EUR =1.4000 you can purchase 2.8000 USD, and so on. Hence, Currency appreciation of EURO which is the base currency in this scenario.

[thaonguyenphuong]

2:08 if 1 EUR =1.3 USD then USD/EUR =1/1.3 ?

[kanchansingh]

The first question of exhibit is not clear, since it says the base currency is getting strong then how the AUD investment become more valuable?

[sammedbhandari]

If inflation is there in Base currency, prices in that currency will increase hence the currency must weaken but by real exchange rate formula, it is actually getting strengthen as real exchange rate is increasing with increasing prices in base currency. Please explain.

[muskaanarora]

8:27 - if AUD/HKD increase, how does AUD denominated expenses increase? isn't HKD appreciating and AUD depreciating? Please explain.

[TheYaniTV]

In Question 4. Isn't the income we receive from the investment in HK in Hong Kong dollars? And if the AUD appreciates and the HKD decrease the AUD denominated value of the income we receive (which is in HKD) fall?

[gonzalosalvado]

Great material! However I have a doubt. In the example of minute 3:45, if the base currency (EUR) rise its value (or appreciate), the exchange rate USD/EUR wouln´t be lower? Thank you so much!

[samiman.]

Apparently forgotten to mention the last tricky question considering the pice currency (not base currency) view, which will result to the result of -8% as a correct answer. Please comment if I am wrong.

[dorcasnjoroge]

please add english subtitles to this video, asking on behalf of hearing impaired people here. Thanks

[PankajKumar-uxje]

Hello sir, I need Currency exchange related Notes ...can you please provide....??