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Basis risk General query

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA AFM Exams › Basis risk General query

  • This topic has 1 reply, 2 voices, and was last updated 7 years ago by John Moffat.
Viewing 2 posts - 1 through 2 (of 2 total)
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    Posts
  • May 25, 2018 at 8:06 am #453876
    tasnuva
    Member
    • Topics: 24
    • Replies: 15
    • ☆

    Say Basis risk comes 0.123, then we will consider it as 12.3 points ?!

    May 25, 2018 at 8:32 am #453881
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54724
    • ☆☆☆☆☆

    It is 12.3 points, but I cannot think as to why you think this is relevant. The basis is relevant when calculating the lock-in rate for futures (or when estimating a futures price) and we keep it as 0.123 in the calculations.

    Have you watched my free lectures on the management of foreign exchange risk and of interest rate risk?

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