Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA AFM Exams › kenduri co (june 13)
- This topic has 9 replies, 4 voices, and was last updated 2 months ago by John Moffat.
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- March 3, 2024 at 6:00 pm #701867
in kenduri why are dividing the amount by the exercise price instead of directly dividing it with the contract size to get the number of contracts
March 3, 2024 at 7:22 pm #701870also when do we calculate lock in rate?
March 4, 2024 at 7:55 am #701894The contract size is quoted in Pounds and therefore the $’s need converting to Pounds before calculating the number of contracts.
March 4, 2024 at 7:56 am #701895The lock-in rate is relevant when using futures for hedging.
August 27, 2024 at 2:54 am #710395Can someone explain, why put option is selected is this question ?
August 27, 2024 at 9:07 am #710406If you ask in this forum, the ‘someone’ is always me, because I am the tutor 🙂
There is a net payment in $’s. The exercise prices are quoted in $’s per Pound. They want the option to sell $’s at a fixed rate and so they need put options (the right to sell $’s at a fixed rate).
Have you watched my free lectures on currency options?
August 27, 2024 at 6:46 pm #710432This Kenduri Co is a popular one))
Mr Moffat,
could you please explain to me – ho we select the necessary spot rate (buy or sell) for multilatteral netting when we need to recalculate all owed to/owed by into the basis group currency?
Two subsidiaries, one owes another in CAD, how do I pick the rate CAD to US$ whether it is buy or sell spot rate?
I can not grasp the logic there.
Thank you!
August 27, 2024 at 7:03 pm #710435The question says that multi-lateral netting is to be converted at the spot mid-rate i.e half way between the buy and sell rates.
August 29, 2024 at 7:30 am #710482Ah, spot mid rates means the average between the two..Ok, seems sometimes I really don’t understand what examiner means.
But thanks a lot Mr. Moffat!
August 29, 2024 at 7:51 am #710486You are welcome 🙂
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