[Tahir]

I’m Attempting F6 And F8

[Tahir]

Thank You sir now my confusion is clear Thanks Alot.

[Tahir]

Thank you Sir for helping but I’m still not able to find the value of first payment help me Pzl…..

[Tahir]

Thank u sir Its mean study text at BPP is giving wrong concept Now my Confusion is clear Thanks alot

[Tahir]

but here the UK importer must pay foreign seller 26500 SFr in one month time so we need Swiss francs in One month’s time so we should use lower 2.6392 but in example higher rate 2.6400 is used

[Tahir]

Thank You Sir now my confusion is Clear Thanks Alot

[Tahir]

The example is on page 375

A UK importer knows on 1 April that he must pay a forign seller 26500 Swiss francs in one month’s time, on 1 May. He can arrange forward exchange contract with his bank on 1 April, where by the bank undertakes to sell the importer 26500 Swiss francs on 1 May at following rate:
Sfr/£ 2.6396 /-0.0004

Ans 26500/2.6400 = £10037.88
Is the Ans is Right in example?

[Tahir]

Thanks for Help me.
This statement is present on BPP study text page No. 374 as a Exam Foucus point
$/£
1.9606 /- 0.0006
the /- 0.0006 represent the Premium

if the company is selling the foreign currency, the premium must be subtracted from exchange rate. If the company is buying the currency, the premium is added to the exchange rate.
Your lectures shows Premium must be subtracted in both cases selling and buying but in book premium added and subtracted in different cases so I was confuse about that.

[Author]

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