• 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

ACCA December 2022 Exam results:
* Pass rates * Comments * Instant Poll * Competition *

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

interest rate futures

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA AFM Exams › interest rate futures

  • This topic has 5 replies, 3 voices, and was last updated 7 years ago by John Moffat.
Viewing 6 posts - 1 through 6 (of 6 total)
  • Author
    Posts
  • November 29, 2015 at 9:54 am #286092
    ali5600
    Member
    • Topics: 1
    • Replies: 0
    • ☆

    Abc company required $45m loan. the event will take place in seven month time. but facility will be necessary in five month time. Abc company expects the loan to be repaid at the time of the event.

    Assume today is 1st December and following futures price are available
    december 96.04
    march 95.77
    june 95.55

    explain how the loan duration will be selected @ which future price.

    Thank

    November 29, 2015 at 11:52 am #286118
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 51532
    • ☆☆☆☆☆

    Because the loan is needed in 5 months time, it is needed in May. Therefore they will sell June futures at 95.55.

    The free lectures on interest rate risk management cover everything you need on this for the exam.

    November 29, 2015 at 1:02 pm #286127
    567890bba
    Member
    • Topics: 5
    • Replies: 10
    • ☆

    The loan is needed in 7 months time. It June 1. June futures will still be used

    November 29, 2015 at 2:31 pm #286141
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 51532
    • ☆☆☆☆☆

    I have not obviously seen the full question.

    However, what was typed above says that the facility (presumably the loan) is needed in 5 months time, and that it is repaid at the time of the event (maybe ‘the event’ is receiving some money from elsewhere). If it is repaid in 7 months time, then it obviously must be borrowed before then!!!

    (and the borrowing is obviously not needed as of today, otherwise there would be no need to use futures at all!)

    November 29, 2015 at 2:42 pm #286146
    567890bba
    Member
    • Topics: 5
    • Replies: 10
    • ☆

    OK Thanks

    November 29, 2015 at 2:52 pm #286150
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 51532
    • ☆☆☆☆☆

    You are welcome 🙂

  • Author
    Posts
Viewing 6 posts - 1 through 6 (of 6 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 Capital asset pricing model (part b) – ACCA Financial Management (FM)
  • John Moffat on Capital asset pricing model (part b) – ACCA Financial Management (FM)
  • palbu on Basic group structures – Impairment – ACCA (SBR) lectures
  • AkilaShaikh on Capital asset pricing model (part b) – ACCA Financial Management (FM)
  • AkilaShaikh on Capital asset pricing model (part b) – ACCA Financial Management (FM)

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