Forums
Derivatives
AFM
answered on 05-Mar-23 06:29
Sir can u plz explain term squares of with a simple example? Not getting a clear idea. By taking opposite position means buying and selling to myself?
latest answer
Square off means Opposite (Ulta) transaction - square off means using exactly the opposite of the same instrument that you used. If you bought a call, you will sell a call. If you went long you will go short Hedge means entering into any other transaction in order to reduce risk - you can hedge using futures or forwards or options. You have some risk exposure that be hedged using any kind of derivative
nazriya nasar
CA Final
★ 7K+
5
633
Derivative
AFM
answered on 04-Mar-23 04:21
Sir does value of forward contract means future price of derivative? Didn't got clarity in what does value of forward contract means
latest answer
Price is the amount at which the underlying would be bought or sold. Value is the difference between spot and present value of future price (continuous discounting is used)
nazriya nasar
CA Final
★ 7K+
1
552
IFM
AFM
answered on 27-Feb-23 17:20
Illustration. 2 Can you pls explain the Star marked items.
latest answer
Glad to know that.
Mansi Kamble
CA Final
★ 0
3
615
Mutual fund- illustration 21
AFM
answered on 27-Feb-23 17:31
Here dividends are reinvested. Means dividends are not received by investors, rather number of units increases So the total return of 1.15 lak is due to higher closing NAV right? why are we here reducing dividends, which is not actually received by the investor?
latest answer
No. What i meant was (closing units x closing NAV - opening units x opening NAV )/ (opening units x opening NAV) - this will not give you 153.33%
nazriya nasar
CA Final
★ 7K+
10
564
Hedge Ratio ?
AFM
answered on 25-Feb-23 15:36
What is the formula for Hedge ratio, and concept behind it ?
latest answer
please click on videos , that attachment related notes , you can refer video no 27 of derivative chapter for hedging concept
Chandu vadla
CA Final
★ 11K+
6
751
Forex
AFM
answered on 23-Feb-23 09:50
What is Exchange Margin, not the margin in Forex ??
latest answer
Yes, if you are selling foreign currency in the forex market, you may still be required to pay a margin to your broker. The margin requirement for short positions in the forex market is typically the same as for long positions, and it is calculated as a percentage of the notional value of the position.
Chandu vadla
CA Final
★ 11K+
5
725
Mutual fund- vedio 28- illustration 4
AFM
answered on 21-Feb-23 18:26
Sir why in this problem we considered market price, discount and premium rates and all when the NAV is directly given?
latest answer
The NAV is not the price at which an investor would be able to buy/sell in the market. The market price is different hence we are computing the price at which actual investment was made and the actual price at which the investment was disposed off
nazriya nasar
CA Final
★ 7K+
1
552
Forex Illustration 46
AFM
answered on 21-Feb-23 10:55
Int is calculated for 2 quarters but there is no mention of when the loan is going to be repaid …. Then did we presumed that because of LC credit period is given as 180 days so loan will be repaid within 6 months? Or Is it because we have to determine amongst the option which one is beneficial and that’s why we are considering same period of time ?
latest answer
Ohhh yeah right ! okay… thank you ..
Priya Napate
CA Final
★ 2K+
2
541
Foreign exchange exposure and risk management
AFM
answered on 20-Feb-23 10:16
What is unwinding in forex market?
latest answer
Let’s say you buy something expecting prices to go up and once prices go up you sell and make money. The second leg of exiting the original position is called unwinding
Nandhu
CA Final
★ 6K+
1
589
Interest rate risk management
AFM
answered on 19-Feb-23 11:13
Hello Sir, What is the difference between rate sensitive and non rate sensitive assets/liabilities?
latest answer
from a bank's perspective any asset that changes its value due to a change in interest rates eg a 5-year bond with a fixed coupon. Similarly for liabilities. Some investments that are long term in nature or fixed assets are not rate sensitive
Suresh Avinash
CA Final
★ 3K+
1
635