• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
Free ACCA & CIMA online courses from OpenTuition

Free ACCA & CIMA online courses from OpenTuition

Free Notes, Lectures, Tests and Forums for ACCA and CIMA exams

  • ACCA
  • CIMA
  • FIA
  • OBU
  • Books
  • Forums
  • Search
  • Register
  • Login
  • ACCA Forums
  • Ask ACCA Tutor
  • CIMA Forums
  • Ask CIMA Tutor
  • FIA
  • OBU
  • Buy/Sell Books
  • All Forums
  • Latest Topics

PQ Awards Nominations

Please help us to win one of the PQ Magazine awards and send in the voting form >>
You can nominate us in any or all of the following categories: Online College of the Year, Study Resource of the Year, Private Sector Lecturer of the Year, and Accountancy Personality of the Year.

Specially for OpenTuition students: 20% off BPP Books for ACCA & CIMA exams – Get your BPP Discount Code >>

FOREIGN EXCHANGE

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA AFM Exams › FOREIGN EXCHANGE

  • This topic has 1 reply, 2 voices, and was last updated 10 months ago by John Moffat.
Viewing 2 posts - 1 through 2 (of 2 total)
  • Author
    Posts
  • March 23, 2022 at 12:21 pm #651723
    shaunak22
    Participant
    • Topics: 218
    • Replies: 41
    • ☆☆☆

    Sir in many forex and interest rate sum there are in interest ratee or forex option there are many exercise price so in kaplan text choose the exercise price which result in the most beneficial position{for eg your domestic currency is pound and you need to make payment in $ available exercise price are as follows-

    1 pound = 1.50$ at a premium of 5 cent which gives us 1.45 $ per pound

    1 pound = 1.60$ at a premium of 20 cent which gives us 1.40 $ per pound

    In this case clearly the 1.50$ exercise price is better since it gives us more dollar per pound but in the BPP kit when they are solving the question they are solving for both the exercise price why is that ?

    DOUBT – should i caclulate total payment in pound for both the exercise price or should i calculate for only 1 exercise price i.e 1.50 in our case & would marks be deducted if i only calculated for 1?

    March 23, 2022 at 4:17 pm #651734
    John Moffat
    Keymaster
    • Topics: 56
    • Replies: 51585
    • ☆☆☆☆☆

    You can never really say which is the best choice because the better the ‘limit’ given by the strike price, the more will be the premium cost (which will be still have been paid even if the option is not exercised). In your example, an exercise price of 1.60 would mean a lower payment in pounds, but the premium is more.

    In the exam you should show the calculations for each of the exercise prices (usually there are only two). If you are short of time then showing the calculations just for one of them will get more than half the marks (because the important things is to prove that you understand how futures work) and your objective always is to get more than half the marks on every part of every question.

  • Author
    Posts
Viewing 2 posts - 1 through 2 (of 2 total)
  • You must be logged in to reply to this topic.
Log In

Primary Sidebar

ACCA News:

 

ACCA My Exam Performance for non-variant Applied Skills exams is available NOW

NEW! Download the ACCA Pass Guide

FREE Verifiable CPD for ACCA Members

ACCA mock exams and debrief videos

ACCA Options:  “Read the Mind of the Marker” articles

Subscribe to ACCA’s Student Accountant Direct

Donate

If you have benefited from OpenTuition please donate.

ACCA CBE 2023 Exams

Instant Poll * How was your exam, and what was the result?

BT CBE exam was.. | MA CBE exam was..
FA CBE exam was.. | LW CBE exam was..

Specially for OpenTuition students

20% off BPP Books

Get BPP Discount Code

Latest comments

  • John Moffat on Activity Based Costing part 1 – ACCA Performance Management (PM)
  • John Moffat on Introduction to Financial Accounting – ACCA Financial Accounting (FA) lectures
  • tobimillz100 on Activity Based Costing part 1 – ACCA Performance Management (PM)
  • omarcham on IASB Conceptual Framework – Introduction – ACCA Financial Reporting (FR)
  • Iby2012 on Introduction to Financial Accounting – ACCA Financial Accounting (FA) lectures

Copyright © 2023 · Support · Contact · Advertising · OpenLicense · About · Sitemap · Comments · Log in


We use cookies to show you relevant advertising, find out more: Privacy Policy · Cookie Policy