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Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA AFM Exams › june 14
Sir I was listening to your lecture on solution of this question 1, just wanted to know is it correct if i calculate locking rate like (1.0659-1.0647)/3=.0004
1.0647+.0004=1.0651
Thanks
That’s fine 🙂
Thank you sir. One more thing i wanted to adk is basis risk always in minus or does it matter minus or plus as in most of your example its minus ,and is it correct we will always deduct unexpired risk. Thanks
It could be either – the way to decide is to remember that the spot rate and the futures price get closer together over time. So the lock-in rate will always be between the current spot and the current futures price.