Hi. I am currently practicing exams for Exam FM.
So far, so good considering I have one month left to prepare.
However, I have encountered problems that are interpreted differently by different book authors and manuals.
First, when the problem says "payments are made immediately", I personally interpret this as an annuity-due problem since you literally pay immediately. For some instances, this interpretation is correct. However for some, I do not get the correct answer because the solution interprets it as an annuity-immediate problem.
Second is an inconsistency I have seen in short-sale problems. Most of the time, interest applies on the stock you borrow and sell immediately. For some, interest does not apply despite the interest rate being given.
Have you encountered the same experiences? What did you do to resolve them? For me, I just guess on a certain interpretation, and if the answer I got is in one of the choices, I assume that my interpretation is correct.
So far, so good considering I have one month left to prepare.
However, I have encountered problems that are interpreted differently by different book authors and manuals.
First, when the problem says "payments are made immediately", I personally interpret this as an annuity-due problem since you literally pay immediately. For some instances, this interpretation is correct. However for some, I do not get the correct answer because the solution interprets it as an annuity-immediate problem.
Second is an inconsistency I have seen in short-sale problems. Most of the time, interest applies on the stock you borrow and sell immediately. For some, interest does not apply despite the interest rate being given.
Have you encountered the same experiences? What did you do to resolve them? For me, I just guess on a certain interpretation, and if the answer I got is in one of the choices, I assume that my interpretation is correct.
Inconsistent Interpretation of Problems