Hi sir, we use lock in rate when spot rate is not given at the date of transaction right?
How do i know if its add or minus for the change in basis?
Ask the Tutor ACCA AFM
June 2011 Q2 Currency Futures
10y ago#1The spot and futures prices always get closer together over time.
So if the futures price is currently higher than the spot, then the lock-in rate will also be higher than spot.
If the futures price is currently lower than the spot, then the lock-in rate will also be lower than spot.
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