- This topic has 1 reply, 2 voices, and was last updated 10 months ago by .
- You must be logged in to reply to this topic.
Congratulations to Jamil from Pakistan and Jeeva from Malaysia - Global Prize winners!
see all ACCA December 2022 Genius Hunt Competition winners >>
Specially for OpenTuition students: 20% off BPP Books for ACCA & CIMA exams – Get your BPP Discount Code >>
Hi Mr. Moffat,
I hope you’re doing well.
I took classes from a well known teacher. The way he has taught us to calculate net return in FRAs is abit different from what I see in examiner’s answer which results in a different answer. Could you please tell me if this is the right approach or my marks will be deducted if I follow this.
Question reference. Awan co. (Dec 13)
Int inc by 0.9
Actual return $766400 (same as examiner)
Gain due to FRA $4800 [=(((4.82-4.79)/100)/12)*4*48000000] different from examiner
Net Return $771200
The way he has calculated gain due to FRA is FRA rate (4.82) less LIBOR (4.09) less 20 basis points (mentioned in question) + 0.9
You would still get the marks doing it this way 🙂