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Greetings Sir,
Hope you’re doing well.For the question mentioned above, hedging choice Futures, the BPP answer says to add gain on futures to cost of borrowing to calculate net cost of loan. Shouldn’t itnbemto subtract gain on futuresfrom underlying cost of loan and add any loss on futures for increase or decrease in interest rate to the underlying cost of loan?
Thank you for your help. Good day to you .
Noshma
I am away from home until tomorrow night and do not have the Revision Kit with me.
Please ask again on Thursday and I will then be able to answer you immediately.
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