LAMMER PLC JUN 06 ADAPTED

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August 22, 2018 at 4:30 am #468791
jihun lee
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for money market hedge, in part b calculation, question states as ” sterling up to 6months ”
What does this six months refer to ?
August 22, 2018 at 7:13 am #468816
John Moffat
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The interest rates are those applicable for borrowing or investing for periods of up to 6 months (so if the borrowing/investing is for (say) 4 months, then these rates apply).
Obviously, as always, they are quoted as annual interest rates, as I explain in my lectures.
August 22, 2018 at 9:23 am #468835
thomas1212
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does it mean that if it wasn’t up to 6 months. What happens if it was up to one month ?
then since the question is asking for in five months, we can’t use this rate ?
August 23, 2018 at 5:47 am #468998
John Moffat
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You could only use that rate for up to the number of months specified.
If it was given for up to one month, then you couldn’t be asked in the exam for 5 months because you wouldn’t know what the rate was!!!!
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