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Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA AFM Exams › keshi co (dec 16)
how to know if its forriegn exchange or interest rate as its not mentioned in the question.
The question makes it clear throughout that they want to hedge against changes in interest rates.
They are borrowing money (and there is no mention of exchange rates anywhere in the question).
Obviously for part (b) it is important to mention the other roles of the treasury department (as are listed in the first paragraph).
how have they made it clear that they wanted to hedge against interest rates
The second and third paragraphs of the question state that they are borrowing money and are unsure about the interest rates.
Requirement (a) asks for a recommendation as to a hedging strategy for the borrowing.