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John Moffat.
John Moffat.-
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Noah098
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sir in coco mocha chai when using exchange traded options at the exercise price of 1.07USD to CHF the no. of contracts happen to be 37.83, and because am comfortable doing underhedging and then using forwards, i took 37 contracts and remaining amount hedged using forwards. is this by any chance wrong? am i disallowed from doing this simply because the nearest number when rounding off comes to 38, i should have overhedged?
so i lose marks for underhedging?
John Moffat
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It does not matter in the exam whether you round up or down when calculating the number of contracts. I always round to the nearest whole number (which here would be 38), but again it doesn’t matter – obviously the final result will be a bit different, but it still gets full makes either way.
Noah098
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