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Part b
PV of underlying asset (Pa) is calculated dollar 30613,600
It says this is the sum of the PVs of the cash flows foregone in years 3,4 and 5. Don’t understand how is this figure was arrived at. My calculator is giving me a different figure to it. Can you comment pleaseI have uploaded lectures working through the whole of this question (which should sort out your problem).
You can find them linked from this page:
https://opentuition.com/acca/afm/afm-revision-lectures/Thank you sir I will look into it when Il be doing second round of my ravion on this question.
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