OpenTuition.com Free resources for accountancy students
Free ACCA lectures and course notes | ACCA AAT FIA resources and forums | ACCA Global Community
ACCA P4 lectures Download P4 notes
October 11, 2014 at 6:39 pm
Thanks for the lecture. Please explain what is lock in rate and we would use it. Also if tick value is given do we use this to calculate profit and loss?
John Moffat says
October 12, 2014 at 10:19 am
On the date of the transaction, we calculate the interest at what the rate is on that date, and calculate the profit or loss on the futures.
Because we are able to estimate the basis risk, we can calculate an effective interest rate on the date of the transaction that give the net effect (of using the actual rate and adding or subtracting the profit/loss on the futures). This is called the lock-in rate.
If the tick value is given, then you can use this to calculate the profit or loss on futures, but you do not actually need to use it – you can calculate the profit or loss in the normal way (it will give the same result). I never bother using ticks
August 2, 2014 at 5:32 pm
very nice lecture God bless you.
August 2, 2014 at 7:04 pm
May 19, 2014 at 2:50 am
Very good way of teaching. Wonderful lectures, easy to understand. It clarifies my confusions about very difficult topic about derivatives. God bless you.
October 28, 2013 at 7:51 am
Can I ask how to calucate the profit or loss on the interest rate future when there’s a tick value involved? thanks.
October 28, 2013 at 4:17 pm
You never actually need to use ticks.
However, if you want to use them then you calculate the difference between the buy and sell prices in numbers of ticks (a tick is 0.01), multiply by the numbers of contracts, and then multiply by the tick value.
October 29, 2013 at 3:19 am
Thanks for making a point, clarifing a lot.
October 29, 2013 at 7:26 am
You are welcome
August 19, 2013 at 9:25 am
very nice lecture. God bless
September 27, 2012 at 2:03 pm
June 5, 2012 at 6:35 am
Thanks a lot!
December 3, 2011 at 6:31 am
Very good lectures!!!. Thank you very much!!!
You must be logged in to post a comment.
OpenTuition.com is dedicated to providing all accountancy students throughout the world with the resources they need to study for the major … Learn more
Please log in to get the most from OpenTuition, registration is free!