[Monsza]

Hello John,

Thanks very much for replying to my question, it is much appreciated as I am self studying. Good to hear about the marking scheme too.

Your lectures are great and helped me a lot.

Many thanks
Monika

[Monsza]

Hello John,

I have a question regarding the calculation of basis.
I have done many questions and cannot work it out.
Which spot rate do we use to calculate the basis = Opening futures rate minus spot rate. Which spot rate to use? Various questions use various rates, either buy rate or sell rate. Is there a rule here? If we are buying futures we should use buy spot rate? (eg. spot rate quoted: 1CHF = 1.1196-1.1222 USD$), so rate 1.1196 should be used?
I always use the wrong rate as every question seem to have its own rule :(.
If i use the wrong spot rate, would I lose many marks in the exam?

Many thanks
Monika

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