Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA AFM Exams › JUNE 2003-COLLAR HEDGE
- This topic has 5 replies, 2 voices, and was last updated 8 years ago by John Moffat.
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- May 28, 2016 at 4:49 pm #317779
Dear Sir,
In this we work backwords to find the minimum rate (floor). Is there any other way finding the same answer rather than trial and error?
Thanks
May 28, 2016 at 5:00 pm #317782Good heavens – you are asking about a question that is from 13 years ago 🙂
Please give me the name of the question and then hopefully I will be able to find it! 🙂
May 29, 2016 at 4:34 am #317851Oh… I’m sorry… Its Troder PLC…..
May 29, 2016 at 8:30 am #317887There is not other way (although I would not actually call it trial and error 🙂 )
I do show in the lectures how to estimate quickly what the effective minimum rate will be when using options (and that is what the examiners answer has done for each strike price).
It is then simply a question of seeing which of them achieves the objective.
May 29, 2016 at 11:07 am #317916thank you
May 29, 2016 at 5:03 pm #317947You are welcome 🙂
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