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Good Day Sir,
In LIRIO CO, while calculating the lock in rate, in the futures hedging part of the question, what the examiner did is dividing 1 by the spot rate (1 by 1.1585).
What I did while solving was, I divided 1 by the Spot Average { (1.1585+1.1618)/2 }.The Net Receipt in Examiner’s Answer is $23.12m whereas my answer is $23.13m.
Would any mark be deducted because of this discrepancy?
If yes, could you please be kind enough to explain the reason behind selecting 1.1585 and not 1.1618?
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