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Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA AFM Exams › Past Exam Dec 2011
Question 2 (b)
1. Under the section of using collar, interest rates decrease by 0.5% to 2.8%:
Assume that the future price is 95.50, then the put option will be exercise, will the calculation change to “gain on exercise” by (50 x 25 x 37)?
Yes it would.
(However you would be wrong in this question to assume that the futures price is 95.50.)
