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Sir after doing quite a few questions tackling currency risk questions , i can say that mostly the questions are related to the payment itself but not the outcome of the hedge, now is it the same for questions in interest rate risk, and if yes well how would we calculate in futures and options the price to pay, would it be in ticks or simply the future price example 95?
I don’t know what you mean by “future price example 95”.
However, most questions (whether foreign exchange risk or interest rate risk) use the lock-in rate.
You never actually need to use ticks in a question. I don’t use ticks because I don’t think it saves any time.
My lectures on foreign exchange risk and interest rate risk (together with the extra lecture on lock-in rates) go through everything needed (including an explanation of ticks).
oh right , and im sure that the lock in rate would be used for interest rate options as they are basically futures,
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