Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA AFM Exams › over hedge
- This topic has 5 replies, 2 voices, and was last updated 8 years ago by John Moffat.
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- May 28, 2015 at 11:06 am #249800
Sir please clarify,contract currency is in £ and transaction is in dollar if its over hedge or under which rate do we use to covert back this amount.
May 28, 2015 at 2:19 pm #249847It depends on whether the transaction involves paying or receiving, and on which the ‘home’ currency it!
May 28, 2015 at 5:07 pm #249925Sir contract currency is euro home currency is euro and we r receiving in dollar and amount is under hedge,please give me the rule which u normally do. Thanks
May 28, 2015 at 8:23 pm #249994If you are underhedged and you need to pay in dollars, then you will need to buy more dollars. So you will convert at the spot rate for buying dollars.
May 28, 2015 at 10:33 pm #250018It means if we r overhedged we will sell dollar so spot rate for selling dollar.Is that correct?
May 29, 2015 at 10:01 am #250115That is correct 🙂
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