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Oh! I thought open rate means buy and settlement means sell. Thanks for the clarification, Mr Moffat.
🙂
Thank you, John for clearing my query. But there is one more thing that I don’t understand in this qn. If you look at the basis calculation, the examiner has used the settlement price of 93.88 and spot price of 94 to calculate the basis. While spot price is not the issue however, since we are selling the futures now, and want to know the purchase price of futures on the transaction day, why didnt we use the OPEN rate of 93.800 instead of SETTLEMENT rate of 93.88 in calculating the basis? Doing so would’ve given us the right buy price of futures right?
Thank You 🙂
Relating to the choice of option, will I get marks for choosing either one of the exercise price listed?
So when the question says “recover capital allowances…..in full in the year they are incurred”, we must begin the allowance working from year 0? Even if I don’t start my calculation from year 0 and begin from year 1 instead, will he award me marks if I state my assumption?
Sir, why indirect costs are not considered in the Npv calcualtion? Cant indirect costs be relevant? and Why answer didnt take inflation into account?
Thanks Lam for the explanation.
And What is Quality control review as safeguard?I got 56% in third attempt. I thought I would fail this time as-well but Alhamdulilah I passed F5. People who didn’t make it through don’t be disappointed there is always light at the end of the tunnel. I know what it feels like to fail. Who knows, you might score well in the next attempt and obtain first class in OBU degree. People who cleared it, Congratulations!!!