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Future price

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA AFM Exams › Future price

  • This topic has 1 reply, 2 voices, and was last updated 7 years ago by John Moffat.
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  • May 21, 2018 at 6:26 pm #453182
    adurich
    Member
    • Topics: 127
    • Replies: 120
    • ☆☆☆

    In the video lecture where u have explained that future price on the transaction date is the balancing figure by finding the basis by apportionment ..do we always deduct the basis from spot rate ?assuming the future price will always be lower than spot rate on the transaction date ?? Am I correct ..

    Do we have cases where future rate is more than spot price

    May 22, 2018 at 9:21 am #453308
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54820
    • ☆☆☆☆☆

    The futures price and the spot rate will always get closer together.

    So if the futures price is currently more than the spot rate, then it will always be more.
    If the futures price is currently lower than the spot rate, then it will always be lower.

    You add or subtract accordingly depending on which is the case.

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