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Troder Question

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA AFM Exams › Troder Question

  • This topic has 1 reply, 2 voices, and was last updated 9 years ago by AvatarJohn Moffat.
Viewing 2 posts - 1 through 2 (of 2 total)
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    Posts
  • March 7, 2017 at 6:53 am #376143
    Avatarbilalahmad99
    Member
    • Topics: 48
    • Replies: 53
    • ☆☆

    I finally seem to solve the mystery around troder question part b (i).
    Troders goin to invest in the scenario and will buy a floor below the cap to set up a collar hedge. So only options we can select for a call option is 4.25 and 4.5. We cannot select 4.75 as a floor because in that case we won’t be able to set a cap above that amount. And the combinations given are the only possible choices to set up a collar hedge.
    I hope my understanding is correct and I will be over the moon as this was my 8th attempt on this question.
    Thank you sir.

    March 7, 2017 at 7:47 am #376172
    AvatarJohn Moffat
    Keymaster
    • Topics: 57
    • Replies: 54843
    • ☆☆☆☆☆

    Yes – you are correct 🙂 🙂

  • Author
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  • The topic ‘Troder Question’ is closed to new replies.

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