Economics and the twist

[ABAL]

Hi,
Needed an advice as regards ECONOMICS. Not sure why the entire notation is topsy turvy in Level III. The currency notation here is regarded P/B=D/F and not F/D as we studied in Level II.
Guidance appreaciated.

 

[pokhim]

Acronym
Definition
D/F
Depth of Field
D/F
Direction Finder
D/F
Disposition Form
D/F
Dust Free
D/F
Dioxins and Furans

 

[cpk123]

I think he meant the economic one Domestic / Foreign.
X USD/ EUR now means 1 EUR = X USD. That is a fundamental change in the curriculum.

 

[S2000magician]

USD/EUR 1.1374 (so USD1.1374 = EUR1.0) has been CFA Institute’s convention for quite a while now: at least six years. It’s backwards from the way currency exchange rate quotes are given in the real world, but it’s not a change for CFA Institute.
I always encourage my candidates to write it out immediately: USD1.1374/EUR1.0. If you get into that habit, you have to work (very hard) to make a mistake.

 

[ABAL]

Magician, the problem is not in solving the qs. I think I can do that. But having studied Economics in Level II from CFAI, I am at wits end to see the puzzle…. and frankly do not understand it one bit.
For Ex. USD/EUR 1.314 is easily tracable being USD 1.314= EUR 1. However, the twist comes that now USD is the domestic currency!!! This was not something we learnt at Level II.

 

[S2000magician]

It’s probably better if you don’t think about domestic currency and foreign currency; think about Currency A and Currency B. Remember that the domestic currency for one party is the foreign currency for the other party, and vice-versa.
If you think about it merely as USD and GBP, or CHF and AUD, or BRL and INR, you’re probably better off: one appreciates and one depreciates.