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KENDURI CO (JUN13)

This topic has 3 replies, 2 voices, and was last updated 7 years ago by John Moffat.

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May 20, 2018 at 3:36 pm #452989
foeldh123
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in KENDURI CO (JUN13),
1. just by looking at the question, how do we know whether to use market hedge ? is it because borrowing and investing rate indicate money market rate ?
May 20, 2018 at 4:43 pm #453004
John Moffat
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The question asks to you advise on an appropriate hedging strategy. So you are expected to go through every method for which you have the information available.
Since you are given the annual interest rates, money market hedging is one of the strategies available.
May 20, 2018 at 5:03 pm #453007
foeldh123
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that means if i did one of the hedging strategy but if it is not stated in the answer sheet, i will still be able to receive some marks ?
May 20, 2018 at 7:30 pm #453024
John Moffat
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But that won’t happen. For this sort of question you will be expected to show all the methods for which information is available.
You are asked to advise, just as you would advise in real life.
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