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For the very first question that I asked you.
Can we say that Option E (The net effect will be an interest payment which is fixed overall) is more relevant to Matching (With no Positive or Negative gap) and not Smoothing. However the exception to my very own statement could be the Basis Risk? As the base for calculating Floating Intrest on Borrowings and Deposits might be differentThank you. Tutor finally understood
There’s another question I’d like to ask.
Q) Which of the following
statements is/are correct?
1 Smoothing is an interest rate risk hedging technique which involves maintaining
a balance between fixed-rate and floating-rate debt2) Asset and liability management can hedge interest rate risk by matching the
maturity of assets and liabilities.In Statement 2, the examiner States the statement is true. But isn’t this statement incomplete? As we should match not just the maturity (term) of Assets and liabilities, but also the rate of interest? Or can the intrest rate be different?
Thankyou Tutor 🙂
Just a random thought.
If a company uses Money Market Hedging for Foreign Exchange Risk.
Which involves use of borrowing and investing (along with use of spot rate).Can we say that company would although be able to hedge Exchange Risk but would be then exposed to Intrest Rate Risk as it would be interesting and borrowing
Thankyou Tutor.
I have noticed that in certain part of syllabus (such as Working Capital Management) effective intrest rate are computed while in risk management they have used Simple Intrest.So is there any specific guidelines as to which one to use under which part of our syllabus
Thank-you Tutor, but I’m still a bit confused.
Considering company’s financial position prior to any expansion.
It has Ordinary Shares of $2500 and Retained Earnings of $5488, which totals up to $ 7988.
Current D/E using book (nominal) values = 4,500/(2,500 + 5,488) = 4,500/7,988 = 56.3%Post Right Issue.
Where additional 500K shares for $2000K would be issued.
Equity finance D/E using book (nominal) values = 4,500/(7,988 + 2,000) = 4,500/9,988 = 45.1%
So post expansion, we are simply adding $2000K, which is the amount of right issue proceeds.So where and how, we added the additional profit from expansion? Because 2000 + 7988 (2500+5488). The retained earnings amount of 5488 had been same in both cases. Shouldn’t it increase
Thankyou Tutor.
But I’m still having difficulty fully understanding this concept.
Could you kindly explain it to me again?How change in NPV because of change in one variable will help me to assess uncertainty.
Thankyou Tutor.
May I know how Sensitivity Analysis addresses uncertainty ?Apologies for not being able to provide complete information.
This a practice question from Study Hub.
The correct answer is A, C.Frankly, I failed to understand the question at first place and ended up choosing wrong options. In addition the answer section does not provide any specific explanation. So, technically i failed to understand both the question and the answer.
Thankyou Tutor. It’s not mentioned anywhere in the video. I guess I just mixed up two different concepts.
a) In case of High few dependency we have this choice to undertake hot or cold revie as a safeguard to reduce the threat within an acceptable level.b) Whereas in case of Engagement Quality Control Review performed under Quality Management (ISA 220) it can only be a pre issuance (hot) review.
Can you confirm whether what I mentioned above is correct?
Thank you Tutor. I understood your point, but still its a bit difficult for me to digest that it would be an adjusting event especially based upon what i have studied under IAS 10 in past. Can you please elaborate a bit more on this 🙂
And also why the return is being directly adjusted to Sales, shouldn’t we record a Sales Return and show the same in Statement of Profit and Loss .
Greetings Tutor. Thankyou for your kind words and blessings. 🙂
Your contribution did played a pivotal role in my success, to the extent that my family often humorously jests that no teacher would willingly take on the multitude of queries and doubts I bring forth. It’s a testament to the depth and breadth of support you provided.
And i relied more on OpenTution Ask the Tutor Forum than my ALP, and also reviewd a lot of answers that you have given in past to students. Also i did watch your videos especially on complex topics like Volenti non fit injuria, Professional Negligence, Structure of Courts in England and Wales and many more.
I always prefer the videos of OpenTution when it comes to complex Topics, used to do the same even with my Skill Level Exams like PM and FR.
Greetings Tutor, Vikas this side, I hope you are doing well.
It’s been few weeks since the last time i posted a query on Ask the Tutor Forum. Because i was busy with my Revision.So i finally gave my exam yesterday (21 March 2024) and i secured 95%. I was literally not expecting this much, while i clicked on “Exit” Button i just told myself let’s just hope it’s above 80%.
Although I didn’t watch many of your videos on YouTube because I was taking classes from an Approved Learning Partner, studying the BPP Study Text, and also going through the ACCA study hub.
But I want to thank you for solving all the queries that I posted on the Ask the Tutor Forum. I don’t think any other tutor would have helped me the way you did, answering my every major to minor query. I would also like to thank the entire team of OpenTuition for providing such a great platform, and also for the Ask AI feature. 🙂
For anyone planning to take the F4 Law English Variant exam, I highly recommend attempting the OT Questions available on the ACCA Study Hub. Questions worth approximately 30 marks were nearly identical to those found on the Study Hub.”
Lastly I was planning to post about my accomplishment on LinkedIn and also mention about your contribution in my result. However, I couldn’t find your profile on the platform. I found profiles of other tutors like John Moffatt, but yours was nowhere to be found. If possible, could you share your LinkedIn profile with me?
Thankyou Tutor! Finally got clear with the logic of Ticket Cases. 🙂
I also have another question relating to Contact Law, although not highly relevant, so would ask it here only. Imagine i enter into a contract with Mr. X but before the due date i inform him that i would not be able to fulfill my side of Contractual Obligation (i.e. an Anticipatory Breach), but Mr X decides to affirm the contract and decides to wait till the due date..
What if on the due date Mr.X commits an Actual Breach of contract can i sue him for breach of contract?Thankyou Tutor 🙂
Apologies for not replying promptly because of the internet restrictions in my area.Thank you Tutor,
One more thing that i wanted to ask was that –In study text it has been mentioned that “a Member can take initiative to requisition certain resolutions be considered at the AGM, provided the notice of same be delivered at least six weeks in advance of an AGM”.
Whereas, in case of certain ordinary resolution requires a Special Notice to be delivered at least 28 days before the date of the meeting.
Now lets imagine, a Member wants to propose a resolution on removal of a Director (who was not set to retire on a Rotational basis) in the upcoming AGM. In such case when would the Special Notice be provided? 28 Days or 6 Weeks (42 Days).
Thank you Tutor, in regards to the same, does Non-Executive Directors also have such Contracts? because as far as i know they are not considered to be an Employee of the Company (rather an outsider appointed mainly for the purpose of Corporate Governance).
Do they have a Salary Package? because while i was preparing for BT i studied that they are paid “sitting fees” rather than salary.
Yes Tutor, i do agree with your answer. Companies Act 2006 states that “Provision to this effect has been in force—
(a) in Great Britain since 22nd December 1980, and
(b) in Northern Ireland since 1st July 1983.”.Thankyou Tutor, based upon your last response does this means that Capital Maintenance is more a theoretical concept than having more practical relevance?
In regards to example of XYZ Corp. What i want to ask is that Net Asset (Asset – Liability) is $1500,000.
What does the figure $1500,000 signify to the creditor ? How by this figure they feel that their debt is secured?Is it because that the Amount of $1500,000 theoretically shows that even if the company were to incur losses up to $1,500,000, there would still be sufficient assets to cover the claims of Creditors?
In a different sense can we say that if the company were to liquidate its assets at their stated values in the Statement of Financial Position (SOFP), there would still be an excess of $1,500,000 after paying off the debts.
Thus, the excess serves as a cushion for creditors, giving them confidence that their debts are safe .
Thank you Tutor. The section is was referring to is from Companies Act 2006, i just mentioned Indian Companies Act to highlight the difference between Company Law of 2 nations.
Thank you Tutor, always appreciate your efforts and time for clarifying things like these.
Apologies for the late reply Tutor. This is the complete scenario.
Ann owns a shop selling prints. She placed an advertisement in the Friday edition of her local paper stating:
‘Opportunity to own a unique Bell print for £500 cash. Offer valid for one day only — tomorrow Saturday.’ When Con saw the advert, he immediately posted a letter of acceptance.On Saturday, Di asked Ann if she would take a cheque for £500, but she refused to accept the cheque and told her she could only have the print for cash.
Later that day Ann agreed to sell the print to Evi, who would pay on collection the following Monday afternoon.
On Monday morning Con’s letter arrived. Later that day Di returned to the shop to pay for the print with cash, shortly followed by Evi’
