Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA AFM Exams › difference methods of benefits of interest rate swap calculation
- This topic has 1 reply, 2 voices, and was last updated 1 year ago by John Moffat.
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- December 27, 2023 at 3:36 am #697402
I note that there are some differences in methods to calculate interest rate benefits of interest rate swap in BPP text book in the current version and previous version (version from 2018 which separate essential reading part and version before 2018 which does not separate essential reading part ). The current version method uses difference of difference or sum of difference of interest rate of loans that two companies must pay in a swap as interest rate benefit. The previous version method calculates the difference between the sum of interest rate that two companies must pay to calculate interest rate benefits. For the current version method , i do not understand clearly about why interest rate benefits can be calculated in this way so I want to use the previous version method which I understand clearly in the AFM exam. What will i get full marks for this method of calculation? and can you explain more about The current version method which uses difference of difference or sum of difference of interest rate of loans that two companies must pay in a swap as interest rate benefit? Thank you!
December 27, 2023 at 10:33 am #697413Either way if acceptable in the exam. I prefer the way that I explain in my free lectures on swaps 🙂
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