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Wardegul (Sept/Dec 2017, amended) using interest rates instead of future prices

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA AFM Exams › Wardegul (Sept/Dec 2017, amended) using interest rates instead of future prices

  • 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)
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    Posts
  • May 6, 2024 at 7:12 pm #705022
    Allan592
    Participant
    • Topics: 1
    • Replies: 1
    • ☆

    Hi. I am working the Interest rate futures (IRF) section of the past exam question ” Wardegul (Sept/Dec 2017, amended) from the BPP revision kit, but, instead on working the answer out using the future prices, I am using the interest rates. Upon completing my answer, I notice that it is different from the model answer, my net return is 963,500 and effective annual rate is 4.92%, whereas the kit has net return of 515,250 and effective annual rate of 4.58%. I’m not sure where I’m going wrong, can you please assist me?

    May 6, 2024 at 9:41 pm #705025
    Allan592
    Participant
    • Topics: 1
    • Replies: 1
    • ☆

    I got it. Apparently, I was using the incorrect base rate 🙂

    May 7, 2024 at 7:00 am #705038
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54831
    • ☆☆☆☆☆

    I am pleased that you have sorted it out 🙂

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