Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA AFM Exams › Q57 asteroid
- This topic has 3 replies, 2 voices, and was last updated 8 years ago by
John Moffat.
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- February 10, 2017 at 10:02 am #371845
since asteriod is receiving money from swiss its reverse money market
euro [ pv ]……………………………………………. [ fv ]
deposit <———————————- 1.5 euros
. { x * 2/12}
;
\ / { * 1.6199}
borrow X {1+2.17} X
(CHF)Shouldn’t flow be like this (money market hedge )
here borrowing rate of chf is directly given 2.17 then why we are finding out i(c) in forward rate calculation
we need to find i(b) right since deposit rate of euro is not given?? and why we are multiplying rates by 2/12 when its already 2month interest rate.Hope my chart flow is understandableFebruary 10, 2017 at 7:06 pm #371893I am away from home until late tomorrow and so I do not have access to the question.
Please ask again on Monday and I will answer you then.
February 13, 2017 at 5:31 am #372146this is to remind you .. 🙂
February 13, 2017 at 9:34 am #372180Interest rates are always quoted annually, so the rates given are annual rates dependent on the time period. So for 2 months it is 2/12 time the annual rate.
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