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The least cost hedging

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FM Exams › The least cost hedging

  • This topic has 1 reply, 2 voices, and was last updated 9 years ago by John Moffat.
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  • December 8, 2016 at 3:28 pm #362269
    abdulbasit16
    Member
    • Topics: 165
    • Replies: 154
    • ☆☆☆

    Sir in the bpp text when comparing the least costing hedging technique they have compared the cost of each hedge using present values when comparing forward, money market hedge and lead payment. I understand that as lead payment is in current terms we compare present values. But just want to confirm that if we are comparing just money market hedge and forward or these both and lagging alternative is it still neccesary to get present values?

    December 8, 2016 at 3:51 pm #362293
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54804
    • ☆☆☆☆☆

    If comparing money market hedging with forward markets then there is no discounting.

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