March/June 2018 Q4 Adverane

Which part of the answer are you referring to - money market hedging or futures?

Hi sir both parts.

With money market hedging we always convert at the current spot. We are borrowing $'s converting to CHF now, and then depositing CHF's. 1.1222 is the current spot rate for selling $'s. As far as futures are concerned we use the lock-in rate, and to calculate it we need to use the current basis i.e. the difference between the current spot rate and the current futures price. This is all explained in my free lectures on foreign exchange risk management.