Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA AFM Exams › Casasophia June 11`
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John Moffat.
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- June 6, 2016 at 4:22 pm #319892
Here when calculating the premium payable wat rate do u take?
therez two
1.3585-1.3618I tuk 1.3618 since we sell dollars to buy euro using that concept its wrong with the MS, my friend tells me that bank always win so we should take the lowest amount so final figure increases? can u clarify pls?
June 6, 2016 at 5:05 pm #319920Why have you not watched my lectures? You cannot really expect me to now type out my lectures here!
Your friend is right – the spread is the banks profit.
However assuming you are talking about the premium on the options, we are not selling dollars at all. The premium is quoted in dollars and therefore we are buying dollars. Hence the higher rate.
June 6, 2016 at 6:33 pm #319977so we should always take the first rate is that so? 1.3585-1.3618
Again, can u explain me the part b) of this question where u have to calculate the spot rate, why do u take 116?
For part c), for the IRP theory u take 128 as the starting point, can u clarify this a s well.
Plus first they calculate for 1/2 yr then 1.5yr 2.5yr then 3.5yr, why is that?This one is the hardest question I have done so far, quite scared now a part time student with work pressure doing a P4 paper is not easy 🙁
June 6, 2016 at 7:13 pm #320017No, of course you should not always take the first rate!
It depends on which way the exchange rate is being quoted and also as to whether you are receiving or paying.
Again, if you cannot be bothered to watch the lectures then do not expect me to spend time typing them all out here.
As for being a part-time student – the vast majority of people taking the exam are working full time and studying part time.
June 7, 2016 at 5:47 am #320139I have watched yr lectures, can u tell me the exact lecture which talks abt this part, I think I have missed one pls….
June 7, 2016 at 10:57 am #320246128 is the current spot rate for converting receipts of MShs into Euros.
The half years result from the fact that the project does not comment until six months time.
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