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Hi john, for LIRIO CO MARCH JUNE 2016 answer in futures calculation, it says that full credit will be given where the calculations are used to show the corection of over hedge using forwards.
Then if we write the answer like the answer ( for the futures calculation) we cant get full credit for the futures ?
If possible can you help me the calculation w the overhedge using forwards ? Because i could not see the forwards calculation for overhedge in the past exam questions
If you don’t show the calculation for the over or under hedge, then you would only lose one mark (assuming you dealt with the futures themselves properly).
An over hedge is dealt with in exactly the same way as an under hedge!!! It is just that you are converting the other way round.
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