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Dec 22 Q1bii – Current price

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA AFM Exams › Dec 22 Q1bii – Current price

  • This topic has 1 reply, 2 voices, and was last updated 2 years ago by John Moffat.
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  • January 21, 2024 at 10:50 am #698745
    phuongmore
    Participant
    • Topics: 131
    • Replies: 128
    • ☆☆☆

    In Dec 22 Q1bii,in basis calculation, to calculate current price on 1/1, the answer is : 100-3.3

    But the question said that Fondir Co can invest funds on a short-term basis at the USA base rate (which is currently 3·3%) less 30 basis points
    I think current price should be : 100-(3.3+0.3)

    Please help me to explain. Thank you

    January 21, 2024 at 6:53 pm #698777
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54835
    • ☆☆☆☆☆

    Futures prices move with the base rate, and are independent of whatever rate Fondir (or any other company) is able to invest at.

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