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Awan Co (12/13)

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA AFM Exams › Awan Co (12/13)

  • This topic has 2 replies, 2 voices, and was last updated 6 years ago by John Moffat.
Viewing 3 posts - 1 through 3 (of 3 total)
  • Author
    Posts
  • August 25, 2018 at 10:23 pm #469431
    niki27
    Member
    • Topics: 82
    • Replies: 15
    • ☆☆

    Dear sir,

    I had a query regarding basis risk.

    I have worked out the current price (95.91) and used the futures price to determine the basis risk, but the answer in the BPP revision kit calculates it on the basis of 5 months.

    Here’s whats confusing me : If today is 1 Nov 2013, February is 4 months away and May is 3 months away from Feb. So how is the 5 months being calculated?

    Really appreciate it if you could answer this.

    Thanks

    August 26, 2018 at 7:36 am #469465
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54701
    • ☆☆☆☆☆

    They are dealing in March futures.

    From 1 November to 31 March is 5 months.

    You have clearly not watched my lectures, and you cannot expect me to type out my lectures here.

    The lectures go through both foreign exchange risk management and interest rate risk management in great detail, with examples. A question on one of these two areas is guaranteed always to be asked in the exam.

    August 26, 2018 at 7:36 am #469466
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54701
    • ☆☆☆☆☆

    They are dealing in March futures.

    From 1 November to 31 March is 5 months.

    You have clearly not watched my lectures, and you cannot expect me to type out my lectures here.

    The lectures go through both foreign exchange risk management and interest rate risk management in great detail, with examples. A question on one of these two areas is guaranteed always to be asked in the exam.

  • Author
    Posts
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