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past paper june 11, q 2 futures

Forums › ACCA Forums › ACCA AFM Advanced Financial Management Forums › past paper june 11, q 2 futures

  • This topic has 0 replies, 1 voice, and was last updated 12 years ago by miyukit.
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  • November 30, 2012 at 8:06 pm #55534
    miyukit
    Member
    • Topics: 9
    • Replies: 15
    • ☆

    in the question, receipt US 20m in 4 month time, using futures hedge.

    So the method should buy (long) the futures. However, the result of the 4 month predict rate is worse than the 4 month forward rate. Therefore we dont do the futures hedge.

    ** I have a question about this, why i should long the futures because the exchange rate likely linear going up 2 month expiry at 1.3633, and 5 month expirty at 1.3698.

    Can i use speculation view ,buy the future contract now (spot rate 1.3618, assume : 1,3625 (1.3633-1.3618)/2 + 1.3625 and sell in the 5 months, then i can make profit .

    thank you very much

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