Wardegul co sept dec 2017

There are three ways that they could organise the treasury function: 1. Have a separate treasure function for companies in each individual country 2. Have a separate treasury function for companies in each separate region (e.g. one for all countries in Europe, one for all countries in Africa, etc.) 3. Have just one treasury function for companies in all countries in the world.

So in the qs above they are asking about benefits of regional treasury function as compared to the global one ..? Can u please explain.some of them or is there any lecture regarding this topic ?

No - the question specifically asks you to discuss the advantages of (a) having a separate treasury function for each country as compared with a separate one for each region, and (b) having a global treasure function as compared with a separate one for each region. There are lectures explaining the treasury function, although the examiners own answer to this question explains the advantages of each very well.

Hi sir, Why is it in question a) ii. Futures Contract in the BPP answer kit, in order to get the gain/loss in the futures market for increased interest rate, the answer given was (0.9436-0.9478) x D500,000 x 3/12 x 90. I dont understand where they get the 3/12?

They are 3 months futures (and are always 3 month futures in the exam) and therefore we always multiply by 3/12. I do explain this in detail in my free lectures on interest rate risk management.

Hi John, So with the FRA of 5.02%, because they can invest at 30basis points lower would i be able to write that the effective interest rate earnt is 4.72% without having to show the calcs?

There were 2 marks for the FRA, and because the question asked you to support your answer with appropriate calculations and discussion then it was necessary to either show the calculations or explain how it would work to get both marks. Just writing 4.72% would only get 1 mark.