07/04/2026
๐ก ๐๐๐ ๐๐ โ ๐๐๐๐๐๐๐๐๐๐ ๐๐๐๐๐ ๐๐๐๐ ๐๐๐๐๐๐ ๐ก
This Weekโs Focus: ๐๐ฎ๐๐ถ๐ฐ ๐๐ฒ๐ฟ๐ถ๐๐ฎ๐๐ถ๐๐ฒ๐
Rule: ๐๐ป๐๐๐ฒ๐ฟ ๐ผ๐ป๐น๐ ๐๐ต๐ฎ๐ ๐ถ๐ ๐ฎ๐๐ธ๐ฒ๐ฑ!
Hereโs the twist! ๐
Your entry only counts if you ๐ฆ๐ต๐ฎ๐ฟ๐ฒ ๐๐ต๐ฒ ๐ฝ๐ผ๐๐, ๐๐ฎ๐ฝ ๐๐ต๐ฒ ๐๐ฒ๐ฎ๐ฟ๐ โค๏ธ, ๐ฎ๐ป๐ฑ ๐๐๐ฒ ๐ฎ๐น๐น ๐๐ต๐ฒ ๐น๐ถ๐๐๐ฒ๐ฑ ๐ต๐ฎ๐๐ต๐๐ฎ๐ด๐.
Answer correctly to score 1 point ๐ฏ, and keep playingโeven bigger surprises are waiting for you! ๐
๐๐ฒ๐ ๐ง๐ฒ๐ฟ๐บ๐ ๐๐ผ ๐๐ป๐ผ๐
๐ญ. ๐๐ผ๐ฟ๐๐ฎ๐ฟ๐ฑ ๐๐ผ๐ป๐๐ฟ๐ฎ๐ฐ๐
A forward contract is an agreement between two parties to buy or sell an asset, such as foreign currency, at a predetermined price on a specified future date. The agreed price in the contract is called the forward rate. In this problem, the contracted forward rate is P60.00 per euro.
๐ฎ. ๐ก๐ผ๐๐ถ๐ผ๐ป๐ฎ๐น ๐๐บ๐ผ๐๐ป๐
The notional amount refers to the quantity of the underlying asset stated in the contract that serves as the basis for computing the value of the derivative. It does not necessarily represent the amount exchanged at the start of the contract. In this case, the notional amount is 100,000 euros.
๐ฏ. ๐๐ฒ๐ฟ๐ถ๐๐ฎ๐๐ถ๐๐ฒ ๐๐๐๐ฒ๐ ๐ฎ๐ป๐ฑ ๐๐ฒ๐ฟ๐ถ๐๐ฎ๐๐ถ๐๐ฒ ๐๐ถ๐ฎ๐ฏ๐ถ๐น๐ถ๐๐
The value of a derivative changes depending on movements in the underlying variable, such as the exchange rate. A derivative asset arises when the change in the market rate results in a gain to the entity. A derivative liability arises when the change in the market rate results in a loss to the entity.
๐ฐ. ๐ฆ๐ต๐ผ๐ฟ๐ ๐ฃ๐ผ๐๐ถ๐๐ถ๐ผ๐ป ๐ฎ๐ป๐ฑ ๐๐ผ๐ป๐ด ๐ฃ๐ผ๐๐ถ๐๐ถ๐ผ๐ป
A short position means the entity agrees to sell the underlying asset in the future. The entity benefits when the price decreases but incurs a loss when the price increases. A long position means the entity agrees to buy the underlying asset in the future. The entity benefits when the price increases but incurs a loss when the price decreases.
๐ฑ. ๐๐ผ๐ฟ๐๐ฎ๐ฟ๐ฑ ๐ฅ๐ฎ๐๐ฒ ๐ฎ๐ป๐ฑ ๐ฆ๐ฝ๐ผ๐ ๐ฅ๐ฎ๐๐ฒ
The forward rate is the agreed exchange rate for a transaction that will occur at a future date, while the spot rate is the current exchange rate for immediate delivery. In valuing forward contracts at the reporting date, the forward rate for the remaining term of the contract is generally used rather than the spot rate.
๐๐ป๐๐๐ฟ๐๐ฐ๐๐ถ๐ผ๐ป๐:
๐ฌ Comment your answer below! Donโt forget to include the hashtags stated in this post in your comment.
๐ Points for each correct answer. ๐ง๐ผ๐ฝ ๐๐ฐ๐ผ๐ฟ๐ฒ๐ฟ ๐ด๐ฒ๐๐ ๐ฎ ๐๐ฒ๐บ๐ฒ๐๐๐ฒ๐ฟ-๐ฒ๐ป๐ฑ ๐ถ๐ป๐ฐ๐ฒ๐ป๐๐ถ๐๐ฒ!
โฐ Correct answers revealed next day (see comment section).
๐กOnly answers from those who ๐๐ต๐ฎ๐ฟ๐ฒ๐ฑ ๐๐ต๐ฒ ๐ฝ๐ผ๐๐, ๐๐ฎ๐ฝ๐ฝ๐ฒ๐ฑ ๐๐ต๐ฒ โค๏ธ ๐ฟ๐ฒ๐ฎ๐ฐ๐๐ถ๐ผ๐ป, ๐ฎ๐ป๐ฑ ๐ถ๐ป๐ฐ๐น๐๐ฑ๐ฒ๐ฑ ๐ฎ๐น๐น ๐ต๐ฎ๐๐ต๐๐ฎ๐ด๐ ๐๐๐ฎ๐๐ฒ๐ฑ ๐ถ๐ป ๐๐ต๐ถ๐ ๐ฝ๐ผ๐๐ ๐ถ๐ป ๐๐ต๐ฒ๐ถ๐ฟ ๐ฐ๐ผ๐บ๐บ๐ฒ๐ป๐ will be countedโeven if the answer is correct.
