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Ask the Tutor ACCA AFM

GOGATH CO (MAR/JUN 21)

SSSimrandeep Singh3y ago
Why is the unhedged amount in Options Contracts converted on 0.2374 and not 0.2370? And why is the premium on options paid on 0.2355 and not 0.2358?
John MoffatJohn MoffatTutor3y ago#1
1. They have overhedged so they end up with too many dollars and so they need to sell the excess dollar and covert them to Ringits 2. The options are priced in US$, so they need to buy $'s in order to pay for the options.
SSSimrandeep Singh3y ago#2
Okay Sir, Thank You!
John MoffatJohn MoffatTutor3y ago#3
You are welcome.
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