Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA AFM Exams › basis method
- This topic has 1 reply, 2 voices, and was last updated 3 years ago by John Moffat.
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- August 7, 2020 at 7:35 am #579500
hello sir i would like to ask you few questions..
i have taken classes for afm from 2 places..now..
so for interest rate hedging i use the basis method..
then one tutor has taught basis method for forex hedging…the other tutor has another method..
it is similar to acca answers published in the site..
so from the first tutor i had gained the knowledge of syllabus… the second tutor covered all acca afm questions.. so i stuck to the second tutors methods.. now..i was thinkingabout the basis method for forex…both tutors showed different methods..so i usually check the answers from acca website..and inthat they do forex hedging by trending the spot rates..so curently i am following the tending of the rates..but i wanted to askyou ..should i use basis method for forex ..the presentation is different for both methods..
my second question is..
for options…suppose 2 pemium rates are given in the question..myfirst tutor shows the calculations for both the premium rates..also in the acca answers provided..they show calculations for allthe premium rates..my second tutor chooses an apt premium rate and shows calculations for 1 premium rate..so my q isshould i show calculations forall premium rates or should i choose 1.. and show for that?
for forex futures hedging the first tutor… shows the profit seperately its a nice presentation.. but i amconfuesd on which method to stick to..i am following second tutors method because its v similar to acca answers..his answers presentation is very much aligned with acca answers presentation.. but first tutors methods are very logical to me..but for now i have practised the second tutors methods for all since he covered all past questions in those methods.. so i changed my initial methods..but isthere a possibilty for acca toask basis method for forex so just that i can be prepared..in advance
then i have one more question..
suppose in a question of fra , futures and options..
my second tutor locks the fra rate he does not show it in so many steps..but in acca answers they show detailed outcome for fra..
so ….i wanted to ask you for fra should i show that outcome or just state the effective rate?
my main study material is printed past papers till the present date so i have a tendency to read those answers after reading mytutors answers because i am not using a kit..so i have a tendency to just check to ensure that my answers are right with past papers so thats why i wanted to clarify beacuse i wanted to know if my answers are enough or should i show like in the past paper ..detailed calculations for fra..showing outcome of allpremium rates..because my tutor chooses one rate according to closest spotrate and gives a note. so i am waiting to hear from you sir..thankyouAugust 7, 2020 at 9:16 am #579510I am sorry but from what you have written I really cannot understand what the different ways are that your two different tutors have been explaining.
I explain all of this in my free lectures and the way I explain in sufficient for the exam.
Also you should not just rely on practicing past papers – the ACCA only show sample questions for the recent exams. You must use a Revision Kit from one of the ACCA approved publishers because they contain all relevant past exam questions (not all past questions are relevant because of syllabus changes) as well as other exam standard questions.
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