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Bpp revision kit question 44

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA AFM Exams › Bpp revision kit question 44

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  • April 28, 2019 at 1:53 pm #514430
    aicca
    Member
    • Topics: 27
    • Replies: 10
    • ☆

    Sir, under hedging using futures ,
    To find the future price on 20 June using the method from open tuition I get the answer as below
    20 April 20 June. 30 June
    Spot.R. 0.6949 0.6978
    (1/1.439) (1/1.433)
    June futre 0.6964 0.698
    =(0.0015) =(0.0002)
    0.0015x10days/71d
    Profit on futures 0.698-0.6964=0.0016

    Whereas in bpp they got 14 ticks
    Also in bpp they have used June forward rate for April spot in calculating 20 June futures which is confusing me. Can u please explain why sir . I have followed your lectures and it is very helpful

    April 29, 2019 at 2:25 pm #514501
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54659
    • ☆☆☆☆☆

    I am sorry but I am away from home until 9 May and I do not have the BPP Revision Kit with me.

    Please ask again on 9 May next week and I will then be able to reply immediately.

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