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Lirio – Futures overhedge

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA AFM Exams › Lirio – Futures overhedge

  • This topic has 3 replies, 2 voices, and was last updated 2 years ago by AvatarJohn Moffat.
Viewing 4 posts - 1 through 4 (of 4 total)
  • Author
    Posts
  • August 26, 2023 at 1:13 pm #690734
    Avatarjustalittlelost
    Participant
    • Topics: 30
    • Replies: 44
    • ☆☆

    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.

    August 26, 2023 at 6:32 pm #690751
    AvatarJohn Moffat
    Keymaster
    • Topics: 57
    • Replies: 54843
    • ☆☆☆☆☆

    That is correct 🙂

    August 31, 2023 at 10:36 am #691048
    Avatarjustalittlelost
    Participant
    • Topics: 30
    • Replies: 44
    • ☆☆

    Thank you so much!

    August 31, 2023 at 5:01 pm #691085
    AvatarJohn Moffat
    Keymaster
    • Topics: 57
    • Replies: 54843
    • ☆☆☆☆☆

    You are welcome 🙂

  • Author
    Posts
Viewing 4 posts - 1 through 4 (of 4 total)
  • The topic ‘Lirio – Futures overhedge’ is closed to new replies.

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