Derivative valuation -Futures

AFM

For calculating Theoretical Minimum price which method should be used sir 1) Spot price + Carrying cost - Dividend Or 2) Discounting the Forward Price through epsilon..

M Naresh

CA Final

★ 3K+

05-Mar-24 20:38

393

Answers (6)

If we have both the information available ? Which method we can go for ?

Thread Starter

M Naresh

CA Final

★ 3K+

05-Mar-24 20:39

Depends on question and what data is provided

Sriram Somayajula

Admin

05-Mar-24 20:39

In Practical question 2 of ICAI both the information has given sir

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Thread Starter

M Naresh

CA Final

★ 3K+

05-Mar-24 20:41

Thread Starter

M Naresh

In Practical question 2 of ICAI both the information has given sir

They have not given value of e? so how will you solve using epsilon?

Sriram Somayajula

Admin

06-Mar-24 05:54

We know 1 + x/1! +Xsquare /2! That way sir

Thread Starter

M Naresh

CA Final

★ 3K+

06-Mar-24 08:03

Thread Starter

M Naresh

We know 1 + x/1! +Xsquare /2! That way sir

Need not do so much activity . if e is not given ignore that method

Sriram Somayajula

Admin

06-Mar-24 10:02