I don’t think that’s correct, we multiplied in Example 2 when it was IR/R$ and our currency was the base currency i.e. IR and in every other example the base currency has been $ and we have been dividing as our currency was in Pounds.

Thank you so much for your brilliant lecture,so i have a question ,Does that mean if a company was to pay 2m forward rate then decided to pay in 5 weeks ,then they will pay using the 2m forward rate or they will have to wait for 2 months inorder to pay?

Sir, I have a doubt.. I thought while buying the 1st currency (eg. $/?) $ we have to divide the spot the rate with the given figure in the question and for selling the 1st currency we need to multiply the latter spot rate with the given figure. But in example 4, where we are selling dollars to receive pounds we are dividing 1.5334 with 150000 when clearly its selling….. Am confused when to multiply and when to divide the spot rate.. Kindly help!!

JojoBeat says

Sir, is there a case in example 3 where they say pennies pm in which case 1 pound will get you more dollars hence you add?

Alicia says

Sir, can you please advise when we multiply versus when we divide?

John Moffat says

I spend time explaining this in the previous lectures on this chapter.

JojoBeat says

We multiply when our currency is not the base currency, we divide when our currency is the base currency. Hope this helps!

abdurrehmanakmal says

I don’t think that’s correct, we multiplied in Example 2 when it was IR/R$ and our currency was the base currency i.e. IR and in every other example the base currency has been $ and we have been dividing as our currency was in Pounds.

nalediroy says

Hi John,

Thank you so much for your brilliant lecture,so i have a question ,Does that mean if a company was to pay 2m forward rate then decided to pay in 5 weeks ,then they will pay using the 2m forward rate or they will have to wait for 2 months inorder to pay?

srmalavika says

Sir, I have a doubt.. I thought while buying the 1st currency (eg. $/?) $ we have to divide the spot the rate with the given figure in the question and for selling the 1st currency we need to multiply the latter spot rate with the given figure. But in example 4, where we are selling dollars to receive pounds we are dividing 1.5334 with 150000 when clearly its selling….. Am confused when to multiply and when to divide the spot rate.. Kindly help!!

John Moffat says

Thank you for your comment 馃檪

prudence25 says

Thank you so much sir. I’ve just learned about dealing with premiums and discounts