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i passed ~~~ become an ACCA affiliate.Thank u so much!
@siukychoi said:
Pass with 58, my fourth attempts, only by my self-study with some free on-line tutorials. Including Open Tuition. I’m so proud of my affords to do self-study on the Paper P@riochenhz said:
I got 70 in P4,
lucky me past at first attempt
After two years hard study, I become an ACCA affiliateI am going to die …i choose the. Wrong question .its the forth time really want to die
thank you,but when i shoud use this method and when i should use my above answer? how can i judge?
@johnmoffat said:
Your answer is assuming the the interest each year is added to the amount of the loan. However, the question says that the interest is actually payable at the end of each year.So, the interest for year 1 (5850) will have been actually paid over, and therefore the amount of the load outstanding is 65000 – 3000 = 62000. Which means that the second years interest will be 9% x 62000 = 5580
as said above,spot future price=1.4260,closing basis=(0.014)/5=(0.0028),so we put together of them 1.4260-0.0028=1.4232.
blockquote> @evalstngj said:
If i may ask, where did both of you get 1.4232 from. If you are not given spot at June or May you cannot get futures price – in May it shd be same as spot.thank you for your patient reply. but i still have questions,as in bpp kit 78,page77,Polytot(06/04),in the answer of the question a,we found that net outcome by using future hedge is 2686272,which means the effective exchange rate is 4124236/2686272=1.5353,which can also be calculated as future price 1.5272+0.0078(closing basis point).Didn’t it is a quicker method to calculate the effective exchange rate/.and in this cases,we could get the net outcome without knowing the future spot rate at conversion or transaction?
@johnmoffat said:
@nonoacca. Sorry, but that is simply not correct.
If you are not given the spot rate on 1 June then it is not possible to estimate the futures price on 1 June, and you cannot be expected to do so.My answer before was correct – the futures price will be 0.0028 higher than whatever the spot rate happens so be. (So…..if the spot rate is 1.4000, then the futures prices will be 1.4028. If the spot rate is 1.5000 then the future price will be 1.5028. We obviously have no idea what the spot rate will be on 1 June – it could be anything.)
However, when the examiner does not give a spot rate at the date of the transaction, but asks you “how a UK company might hedge the risk exposure” then what he is expecting is that you explain how we would use futures (i.e. leave the transaction at risk, but start a futures deal so that the profit or loss not he futures will ‘cancel’ the gain or loss on the transaction); state the futures deal that you would enter into (i.e. buy 18 June futures contracts at 1.4269); and to state that this would effectively fix the net result (the transaction converted at whatever spot happens to be, plus or minus the profit or loss on the futures) as though it was being converted at 1.4288 (as calculated in my previous answer).
However, the question is very strange in that the UK does not use Euros, and so assuming that they worked in GB Pounds then using $/Euro contracts would not hedge the risk at all – they would use $/GBP futures!!!!
thank you very much.
@johnmoffat said:
It is an assumption based on the fact that because they are payable at the end of the project there is no profit to set them off against.
However in P4, there are many places where you have to make assumptions and if you assumed that they were tax deductible (and stated your assumption) then you would still get the marks.
(Incidentally, the examiner who set this exam has since been replaced – the new examiner is more clear about this sort of thing.)just remember ,it is a math question… when you learn math you will know it.95%=-1.645,99%=-2.330