- This topic has 1 reply, 2 voices, and was last updated 10 years ago by .
Viewing 2 posts - 1 through 2 (of 2 total)
Viewing 2 posts - 1 through 2 (of 2 total)
- You must be logged in to reply to this topic.
OpenTuition recommends the new interactive BPP books for March and June 2025 exams.
Get your discount code >>
Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA AFM Exams › currency futures and basis Casasophia(june 11) Polytot(june 2004)
Its about the basis adjustment we make on the future spot rate to determine the lock in futures price. Sometimes the future spot rate is reduced by the basis and some times added on the future spot to determine the futures price. In june 2011 question casosophia co, the basis is being deducted from the 5-month expiry futures(1.3698) and if you see in June 2004 question Polytot plc the basis (0.0078) has been added to the futures (1.5275) to determine the lock in futures price.
When do we add the basis and when to deduct from the future spot rate??
Please help
You do whatever makes the futures and spot to be closer together 🙂