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1. in interest rate futures, when we calculate the number of contracts, are we allowed to round up ? (like if the figure is 1.5 we round up to 2 contracts and when it’s 1.3, we round down to 1 contract)
2. why provide 2 lines for AWAN CO (DEC13), ?? under December it has 0.342 and 0.097…..are these two figures indicate premium cost ??
3. under the interest rate futures calculation, we usually know the expiry date but does this “expiry date” refers to the expiry date of the future price that it ends ???
4. in, AWAN CO (DEC 13) for the calculation of unexpired basis for the futures price, it has used 2 / 5 to multiply with 1.15. Does this 2 means that prices quoted in basis points for the months indicate the last day of each month ? for in this case for march, we assume it is last day of the march that is why we have used the figure “2” to get the expiry date of February ???
1. It doesn’t matter for the exam if you round up or down. I always round to the nearest whole number.
2. They are the premiums (in annual %’s) for each of the two different strike prices.
3. With futures we always know the expiry date. For example, if they are March futures then they expire at the end of March.
4. Futures expire always on the last day of the relevant month.
You have obviously not watched my free lectures, and you really cannot expect me to keep typing out what I explain in my lectures. It is pointless trying to learn P4 by simply working through past questions without studying first.
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