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Passed with 83%!

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53% with my first attempt

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59% – my 3rd attempt

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Passed with 67% in first attempt

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The unrealised profit should be (1-1/1.25)*2=0.4 million, is it correct?

Thank you sir

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pass with 64%

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Passed with 82%, thank you sir John Moffat !!

[Annora]

Hi Sir, thank you for explaining

But in BPP Mock examination 4, question 4

KEW Co is planning an investment of $10 million for a six-month period starting in three months’ time. KEW Co is worried about interest rates falling and hedges the risk using an appropriate FRA as follows:
6-9 FRA 2.80%-3.10%
3-9 FRA 3.00%-3.20%

Assume that in three month’s time, interest rates are 3.50%.

The company is about to invest, shouldn’t they borrow the money from the bank?
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I think I understand now, the company is worried about interest rates falling, only when they intend to deposit money, they will worry about the decreasing interest rate.

[Author]

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