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Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA AFM Exams › Lirio – Futures overhedge
Heya John,
In the M/J 2016 question “Lirio”, there is an overhedge on futures and while the answer states that credits will be given for calculating the correction, it doesn’t show the calculations. Do we correct the overhedge by selling €17,000 on forward market?
Please let me know if i’m wrong
futures reciept for 185 contracts = 20003.01
overhedge ( 17*1.1559) = (19.65)
net = $19983.36 (000s)
Thank you for all your help.
That is correct 🙂
Thank you so much!
You are welcome 🙂