YAhmed

looking at the book they handle derivative different than I typically do.

They did NOT do this step:
1.02^(90/360)*1000
You and I both did, so our answer anything great than 0 is good.

So their calcs do not calculate interest. Seems like an odd way to do it.

Their method just seems confusing.

It appears they are calculating the return.
So in my example its appears its 1009 (the amount of yen we end up with)/1000 (amount of yen we started with)-1 which is their approx .00969 which annualized is 3.8 approximately.

So they get the same answer, thats just a confusing way to do it. I see why this is confusing in the book. Let me know if my explanation is bad.



Edited 1 time(s). Last edit at Saturday, May 7, 2011 at 08:33PM by stingreye.