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Question 287
What are the expected Sterling receipts in one month using a forward hedge (to the nearest whole number)?
A – $56079
B – $56110
C – $178220
D – $178330Answer
Forward market
Net receipt in one month (240000-140000) = 100,000 Euros
Edwen co needs to sell euros at an exchange rate 1.7832 euros = $1
Dollar value of net receipts = 100,000/1.7832 = 56079my question where did we get 240,000 Euros from as no relation to this figure in the senario?
Thanks in advance
You are correct, and BPP has made a complete mess of this question!
Have you looked on the BPP website (using the code in your Revision Kit) to see if there is an errata sheet correcting this question?
Thanks a lot for the advice
I googled it and I had the following link for any students to benefit from the FM errata sheet BPP kit
I am pleased that you found the solution, but you must not post links to pirate websites. It is illegal, unethical, and against ACCA regulations to download copies of copyright material.
(And I am puzzled why you didn’t access the BPP website legally using the code in your Revision Kit!!)
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