Posts: 8
Joined: Mon May 09, 2016 10:39 am


Postby Aegis.Sameerdutta » Mon Oct 24, 2016 6:08 am

Please help on the attached query as answer seems to be contradictory to explanation
(257.61 KiB) Downloaded 122 times


Finance Junkie
Posts: 946
Joined: Wed Apr 09, 2014 6:28 am


Postby edupristine » Tue Oct 25, 2016 11:39 am

Hi Aegis

All options are incorrect here right answer is (-$200,$200,$350)

1. In first condition when RNS unhedge the prices, prices rises from $1800 to $2000 then it has loss of $200.
2. In second condition when RNS uses futures to hedge position, it has profit of $200 because selling prices is rises from $1800 to $2000
3. in long put position RNS sell the gold at gauranteed price and it will secure its prices by having a strike price of $50 , so from the amount of $2000 and $50 strike price the final amount is $2400 so its $350. (2400-2000-50)

Return to “FRM Part I”


Global Association of Risk Professionals, Inc. (GARP®) does not endorse, promote, review or warrant the accuracy of the products or services offered by EduPristine for FRM® related information, nor does it endorse any pass rates claimed by the provider. Further, GARP® is not responsible for any fees or costs paid by the user to EduPristine nor is GARP® responsible for any fees or costs of any person or entity providing any services to EduPristine Study Program. FRM®, GARP® and Global Association of Risk Professionals®, are trademarks owned by the Global Association of Risk Professionals, Inc

CFA Institute does not endorse, promote, or warrant the accuracy or quality of the products or services offered by EduPristine. CFA Institute, CFA®, Claritas® and Chartered Financial Analyst® are trademarks owned by CFA Institute.

Utmost care has been taken to ensure that there is no copyright violation or infringement in any of our content. Still, in case you feel that there is any copyright violation of any kind please send a mail to and we will rectify it.