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June 2015 MCQ

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FM Exams › June 2015 MCQ

  • This topic has 3 replies, 2 voices, and was last updated 8 years ago by John Moffat.
Viewing 4 posts - 1 through 4 (of 4 total)
  • Author
    Posts
  • September 7, 2016 at 9:19 am #338507
    acca9
    Member
    • Topics: 68
    • Replies: 50
    • ☆☆

    “Borrowers hedging against an interest rate increase will buy interest rate futures now and sell them at a future date”

    Why is this incorrect?

    September 7, 2016 at 10:49 am #338540
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54701
    • ☆☆☆☆☆

    You need to watch my free lectures on interest rate futures where this is fully explained.

    As interest rates increase, futures prices will fall. So to make a gain when interest rates increase you sell futures now and buy back at a later date.

    September 7, 2016 at 10:52 am #338543
    acca9
    Member
    • Topics: 68
    • Replies: 50
    • ☆☆

    I see. That’s clear now.
    Thanks

    September 7, 2016 at 11:03 am #338551
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54701
    • ☆☆☆☆☆

    You are welcome 🙂

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    Posts
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