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Which method for interest rate hedge?

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA AFM Exams › Which method for interest rate hedge?

  • This topic has 4 replies, 3 voices, and was last updated 9 years ago by John Moffat.
Viewing 5 posts - 1 through 5 (of 5 total)
  • Author
    Posts
  • March 2, 2016 at 7:02 pm #303091
    foxy
    Member
    • Topics: 1
    • Replies: 1
    • ☆

    While solving a hedging question for interest rates, does it matter if i calculate the interests in a percentage and directly reach the effective interest rate percentage for the futures and options calculation? Or do i need to calculate every amount applying the interest rates? I find calculating keeping the interest rates in a percentage to find the effective interest rate method much faster and shorter as it avoids extra calculation. Will it affect my marks?

    March 2, 2016 at 11:24 pm #303129
    thegoal24
    Member
    • Topics: 6
    • Replies: 26
    • ☆

    Good question I was wondering about that too after doing Phobos Co 12/08

    March 3, 2016 at 8:06 am #303168
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54701
    • ☆☆☆☆☆

    Unless the question specifies an approach, then either will get the marks 🙂

    March 3, 2016 at 8:09 am #303171
    foxy
    Member
    • Topics: 1
    • Replies: 1
    • ☆

    Thank you! 🙂

    March 3, 2016 at 8:22 am #303183
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54701
    • ☆☆☆☆☆

    You are welcome 🙂

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    Posts
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