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Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA AFM Exams › MJ21 Gogarth Hedging strategy
I see the answer in MJ21 Gogarth, question on Hedging strategy and find that after each calculation, there is discussion on it.
For example:
[Calculation] Net receipt : $37.4m – $14.5m = $22.9m
[Discussion] The net receipt is $22.9 (see working)
[Calculation] Forward contract : $22.9/0.2374 = MR 96.4m
[Discussion] The receipt from a forward contract would be MR $96.4m
[Calculation] Futures …
[Discussion] 193 Sep contract to buy MR are required (see working)
This leaves a small amount of over hedge currency which can be hedged at the forward rate, giving a net receipt of ….
I wonder if I only calculate without discussion, would I award full mark ?
Of course, I will include an separate section which advise and recommend an appropriate hedging strategy,
Thank you
Provided that you are advising and recommending based on your calculations, then you would get full marks (provided obviously that your calculations were correct and that your advise and recommendations were sensible based on your calculations 🙂 )
