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For part B answer, why it is directly converted using option. Should this not be converted first at spot like in example 3 and then adjust the profit/loss through the difference of option and spot rate?
No – example 1 is an example of OTC options. It is only in the case of traded options that we look at the difference between the exercise price and the spot rate.
I do explain this in the free lectures working through these examples. There is no point in using the notes without watching the lectures because they are just lecture notes and it is in the lectures that I explain and expand on the notes. If you are not watching the lectures for any reason then you need to buy a Study Text from one of the ACCA approved publishers and study from there.
Thank you John for your support, am watching all lectures with the study notes. They are amazing.
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