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Unexpired basis

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA AFM Exams › Unexpired basis

  • This topic has 2 replies, 2 voices, and was last updated 1 year ago by John Moffat.
Viewing 3 posts - 1 through 3 (of 3 total)
  • Author
    Posts
  • November 13, 2023 at 1:51 pm #694759
    charlie00
    Participant
    • Topics: 4
    • Replies: 27
    • ☆

    Hi, I am struglling to understand the apportionment for unexpired basis. Do you have a formula for the time fraction?

    I understand that the basis narrows linearlly, but when trying Alecto Co they apportioned the basis as 2/6.

    $22m in 4 months’ time on 1 May 20X2, expecting full repayment 9 months from now. Choose June futures.

    My understanding for the numerator is 1 May – 30 Jun = 2 months unexpired

    But why would the denominator be 6?

    Thanks!

    November 13, 2023 at 2:03 pm #694760
    charlie00
    Participant
    • Topics: 4
    • Replies: 27
    • ☆

    I can see this now; it’s the period from Now to the futures end date

    November 13, 2023 at 4:16 pm #694775
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54656
    • ☆☆☆☆☆

    Correct 🙂

  • Author
    Posts
Viewing 3 posts - 1 through 3 (of 3 total)
  • The topic ‘Unexpired basis’ is closed to new replies.

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