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The very first line of futures is:
£/$ Currency Futures (CME, £62, 500)
Sept 1.5350
Dec 1.5275This means the rates are quotes (Home/Fx), but the question is solved as though the format is (Fx/Home).
Pls can you provide some clarity on this.
Futures tend to be quoted like this in the exam.
The way to know is to look at the way spot rates are quoted.
Since the spot is around 1.54 $/GBP, you can hardly expect a futures price of 1.535 to be other than $/GBP as well 🙂
Hey
I have seen that the answer to this question stopped at the number of contracts needed.
Can you, just for the purpose of understanding, post an answer where you go further and determine the net outcome of the futures?I don’t know which answer you are referring to.
Certainly the examiners own answer and the answer in the BPP Revision Kit don’t stop at the number of contracts needed (and I assume that you do have a Revision Kit?).Hi John,
In polytot plc, when calculating options, we are given 5 strike prices. Do we have to calculate the outcome of all the prices?Ideally yes. However most of the marks are for proving that you know how options work. So if you are short of time then you should get more than the half marks needed for this part by illustrating just one of the strike prices properly (and just stating that others are available).
Obviously if you do have the time (which is unlikely) then show all of them.
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