- This topic has 7 replies, 2 voices, and was last updated 9 years ago by
.
- Posts
Sir
what is the significance of companies being outside of the group in the netting?
1. are we only considering balances inside the group?
2. if yes, then why are we considering the the 2 payments mjy owes to co2 and co3?
3. as a hypothetical, had the 170 and 120 payment been under the c3 column, would we have considered them?
thank u
1. It is both inter-group and external transactions that need netting off.
2. If the 170 and 120 had been payments / receipts just between external companies then they would have been irrelevant. It is only transactions affecting the group that the treasurer is concerned about.
i have tried the $ pmt/receipts by adding vertical and horizontal.. and i am not getting the same answer as in the kit.
how is one supposed to approach this?
am not getting it. however, lets say i assumed a figure of 100k. it could be payment or receipt.
what if i worked out the hedges assuming once that it was a payment and once if it was a receipt. what sort of marks i will get?? (also assuming that i talk about multilateral netting)
following is just in case u feel like spoon feeding me:
mjy—-140—(290)—-(150)
s1——60—————60
s2——30—–(50)—–(20)
c1————–(90)—–(90)
c2—–170————–170
c3—–120—-(40)—–80
c4————–(50)—–(50)
===================
——–520—(520)—–0everybody owes everybody!!!
You would get some marks for proving that you knew how to hedge the foreign currency payments and receipts (even if you were using the wrong amounts), but you would obviously some marks for not having netted off properly.
You are welcome 🙂
Do remember – nobody will complete 100% of the paper perfectly. Your job is to make sure you get at least 50% and you will get this by proving that you understand things. Getting every figure correct is not necessary (and is not going to be possible for anyone 🙂 )
- You must be logged in to reply to this topic.