ACCA I Advanced Financial Management (AFM) I Hedging Foreign Exchange Risk - AFM Lecture 9

[@shivanithakur-ic5pe]

external hedging tech time stamp Forward Contract@ 1:00:33 Money Market Hedging @ 1:08:59 Future contracts @ 1:40:32 Options @ 2:36:45 Swaps @ 3:14:48

[@kailasammeena1530]

No words ….such a kind heart person I have never met in life…amazing teaching…

[@bolajimoh9855]

My goodness! See how you simplify the teachings, God bless You Ma'm. From Nigeria

[@pradeepbhatnagar4848]

Well explained in vry. Simple language.Nice nd Praiseworthy Lecturer.

[@investube6584]

Most powerfull lecture I could find in the internet (Including Paid Cources). Very very thank full to Miss Sabi Akther.

[@zayanyan8496]

Time stamp 1:37:00 forward and money market hedge, I have suggestion for dealing with this calculation Sometimes its confusing whether to divide or multiply and whether to choose lower or higher rate This issues can be solved by following ways 1- check whether the exchange rates are quoted as per home currency ( eg. in this question its a France company so, check whether rates as given as 1 Euro = ....) if so, then DIVIDE 2- Check whether its a receipt or payment , if its a receipt (means your receiving money) then choose right side rate, and divided by right side rate of quoted rates , if its a payment then divide by left side of the quotes rates. Then if the exchange rates are quotes 1$ = ( means as per foreign currency) then you multiply ., and for receipts multiply by left side rate (opposite of first one which did above) , and for payments choose right side one .. so In summary For normal quotes rates , > DIVIDE > if receipt > choose right side rate For not normal rates > Multiply > if receipt > choose left side rate . Hope this is beneficial , and do let me know if im wrong . Thanks

[@pradyumnapawar2902]

I would like to add one more logical thing For eg exchange rates is $20-22 and its receipt of $10000 so we always know bank always benefits themselves and mathematically if denominator is higher we would get less value so combining both if 10000/22 (with higher denominator) will be getting 454 in home currency as revenue , even we looked with $20 we will get 10000/20 = 500 so between 500 & 454 we will be receiving 454 coz bank always benefit themselves....

[@Iresh-r5s]

My simple trick to identify the lower or higher rate - 1)Check the base currency - eg - ($/EUR) = 1.501 - 505 base currency is EUR. 2) Then check whether you need to buy or sell EUR (if a payment of $10,000 need to sell EUR , Receipt of $10,000 need to buy EUR) 3) Every time bank wins (take the lower rate if there is sell of EUR , take the higher rate if there is buy of EUR)

[@Iresh-r5s]

Multiply or divide concern 1) Check what is the strong currency - ($/EUR) = 1.501 - 505) strong currency is EUR because we have to pay minimum of $1.501 to buy 1 EUR. 2) Check how they have given the rate - Above base currency also EUR 3) If the amount is given in Strong currency (EUR.10,000 to convert to $ & base currency is strong currency (EUR) - Then multiply 4) If the amount is given in weak currency ($.10,000 to convert to $ & base currency is strong currency EUR - Then divide *Other way around for if the scenario change

[@mehvishkhan2853]

Thanks alotttttt!!! Your lectures are GOLD and the way you teach, it sticks in my mind. All these logical examples. Thanks a lotttt

[@pleradcallfx]

Absolutely amazing. Thanks for the lectures.

[@ibehtv]

Madam, you are such a brilliant and kind hearted teacher(you don't lecture,you teach!).I particularly enjoy it when you pause and ask,"Tell me,how will you do it? Tell me." I most times allow the ads to run, because I know that is the only way l can repay you for now. It is not a bet, you will still hit 200k subscribers and beyond in Jesus' name. With much love from a thankful heart.💕 💕 💕 💕 Emmanuel Armstrong Ibeh,from Lagos, Nigeria.

[@SabiAkther]

@@ibehtv I have no words to say. I am really so thankful to God for helping me to help you people in your ACCA journey!!!

[@ibehtv]

Thank you Ma.

[@blackm9063]

please keep on making this type of videos as it is very much helpful

[@joannapolela678]

In test your understanding 5, I don't understand why we did not convert the $275 000 to pounds before dividing it by 25 000 to find the number of contracts?

[@ajaypokhrel8977]

thank you very much mam . lots of love from nepal

[@asadrahaman6849]

One of my favourite topics in FM.Nice lecture ma'am🥰.

[@SabiAkther]

One of my favourite topics too. Thank you 🤗

[@asadrahaman6849]

@@SabiAkther Welcome.

[@ngomusacherncy8432]

Yoh guys wehhhh... this topic has tested my patience😅. I have no words for Sabis skills and patience. How much does one earn after suffering this much torture?😂🎉??? I know in South Africa this is a big part of the CFA qualification and banks pay super generously for those skills. Curious to know in other countries. I will come back to this lecture stronger in a few weeks🙏🏽

[@Alice-ze9ol]

Dear Sabi, why do we deduct the loss from the total amount CHF amount at 2:17:00? If we realize the loss, thus I expected to increase the amount (2.55m CHF minus minus 0.112 CHF).

[@AustinDustbin]

since it is a receipt, a loss would reduce the amount the company receives. In the other question, it was a payment, hence a profit would reduce the amount the company needed to pay.

[@AkashSrivastava-md9bo]

Hello Mam, Thank you for the lecture, it was really helpful. Can you please let me know at time stamp 1:30:00, why are we using 1.9510? My understanding was to think from Bank's point of view about these rates. So my understanding is 1AS $ = EUR 1.9510 - 1.9540 rate means for me is 1.9510 is to buy 1 AS$ and 1.9540 is to sell 1 AS$. Here we would be selling the As$ so why are we not using the other rate? I'd be helpful if you could help with this. Thank you.

[@caasifsafder3403]

mashallah ❤️👍

[@marytheresa.k.a]

why did we choose spot rate $1.510 in TYU-5?

[@taskeenbussawon4798]

Thank you so much. Currency Swap came out in March 2021 CBE Exam

[@Iresh-r5s]

In test your understaing 5 , when calculating the no of contracts first we need to convert the $275,000 to GBP using exercise price isnt it ? time 3.13.00

[@shahidakhther-i3p]

your correct

[@FrancCastlee]

Great lecture, thanks. Are you using Camtasia to record these ?

[@fionazhou1178]

You can do =-sum() to get negatives

[@fjaved0]

Where can I download AFM Study Text by Kaplan Publishers

[@anjuweerasingha7825]

Great lecturer

[@santoshsubedi3744]

Hi Maam at 2 hrs 8 min you have deduct the profit of $ 99000 from the total amount and in at 2 hrs 16 min you have deduct the loss as well . can you explain the reason why both loss in on question you have deduct and in another quest profit you have deduct . If profit is deducted then for loss it might need to go another way . only this confusion from whole this 4 hrs lecture. And thankyou for your lecture. Hope you will respond soon .

[@Aye--.--]

Adding a reply here coz I need to know, too. That's the only part I find confusing.

[@AustinDustbin]

same question

[@AustinDustbin]

since it is a receipt, a loss would reduce the amount the company receives. In the other question, it was a payment, hence a profit would reduce the amount the company needed to pay.

[@AustinDustbin]

Dear Ma'am, could you please share the link for these ppts.

[@AnjaliPayneeandy-k1b]

❤❤❤

[@tatendamutedzi1753]

Thank you so much! I made it

[@Nyarie9904]

Congrats!

[@vin7281]

Sorry, i have a question. with regards to test your understanding 5, why did you select 1.50. is it because 1.50 gives us a better receipt when we convert to pounds? because in test your understanding 4, we chose the one with higher figure but here at 3h09mins you picked 1.5800 so I'm kinda unsure why. thank you so much

[@anjuweerasingha7825]

Test understanding 5-- It is a call option ..( option to buy ) Exercise price calculated as follows..exercise price+ premium.( Since this is a option to buy ,we select what is the lowest cost....lowest cost came at 1.50

[@vin7281]

@@anjuweerasingha7825 I see.. thank you for taking the time to reply and correct my doubts.

[@sheharyarsiddiqui5805]

Can you please share the notes?

[@sharonsanyu7384]

Thank you

[@obedadom-miah8045]

💕🔥

[@sherinreji]

ma'am where can I get these notes- could you please share the notes

[@SabiAkther]

Inshaallah soon

[@nepalikitchen_07]

@@SabiAkther what about notes?

[@kennyotunaiya7307]

Check the Kaplan study kit

[@EmanKhan-p4m]

​@@SabiAktherpls share