Treasury&RiskMgmt
Hi,
What is the definition of "SPREAD" in terms of finance. Please explain with some examples
Regards
Blessy
Spread is the difference between two similar measures In the stock market, for example, the spread is the difference between the highest price bid and the lowest price asked.
With fixed-income securities, such as bonds, the spread is the difference between the yields on securities having the same investment grade but different maturity dates.
For example, if the yield on a long-term Treasury bond is 6%, and the yield on a Treasury bill is 4%, the spread is 2%.
The spread may also be the difference in yields on securities that have the same maturity date but are of different investment quality.
For example, there is a 3% spread between a high-yield bond paying 9% and a Treasury bond paying 6% that both come due on the same date.
The term also refers to the price difference between two different derivatives of the same class.
For instance, there is typically a spread between the price of the October wheat futures contract and the January wheat futures contract. Part of that spread is known as the cost of carry. However, the spread widens and narrows, caused by changes in the market -- in this case the wheat market.
Similar Messages
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Treasury&RiskMgmt-Correspondence-Reconciliation flag
Hi,
ERP2005Ehp4 Release
SAP-FSCM -Product
In the customizing settings for the correspondence user can check the flag "Reconciliation"
What does it mean???
The customizing path is: SPRO --> Financial Supply Chain Management --> Treasury & Risk Management > Transaction Manager> General Settings --> Correspondence --> General Settings --> Assign Attributs for Business Partner Groups
Regards
BlessyHi,
I am sending only answers.If wrong pls correct me.
1.A,C
2.C
3.A,B,D,E
4.ACE
5.ABCD
6.B
7.BE
8.ALL
9.ABC
10.ABCDE
11.A
12.ABCD
13.E
14.BC
15.ALL
16.ABC
17.ACD
18.AC
19.B
20.ACDE
21.DE
22.B
23.ABCD
24.CD
25.C
26.BDE
27.BCE
28.C
29.CDE
30.BCDE
31.BDE
32.A
33.B
34.ALL
35.ABC
36.ALL
37.ABC
38.A
39.ACDE
40.AB
41.ABE
42.CD
43.ABCE
44.CD
45.ACDE
46.BD
47.AC
48.CD
I have sent answers for the questions.If any answer is wrong pls correct me.
Assign points if useful
Regards,
S.VINAYA KUMAR -
Treasury&RiskMgmt - Exposure Management
Hi,
The context is "Report Logistics in logical database for exposures"
Here, What is meant by "Logistics" ???
Thanks & Regards
BlessyHi Blessy,
Can you explain a bit more, maybe with some transaction codes etc? Informative questions are more prone to get better responses
best regards!
Sandip -
Hi,
Please explain to me the below terms with examples
1) Price valuation procedure
2) Impairment procedure
RegardsHi,
FWBS - Manual Posting is valid only for securities. I am just giving an example.
In securities there might be some charges for holding an account which is not periodical. Also there will be brokerage/ commisision involved for transactions which can be posted using manual posting.
Regards,
Ravi -
What is FRA?? Please reply me a detailed way with examples in a business point of view??
Hi Blessy,
FRA is forward rate agreement. it is for aperiod. Example is 6/9 FRA means that the period start is six months and end is 9 months. During this period you will enter an interest rate swap. Again this swap will have a floating leg and a fixed leg. Those details will be entered in the system.
Hope this helps
best regards!
Sandip -
What is meant by Fair Value Hedge and Cash flow hedge??
Hi
First you need to know what an hedge is
Hedging - In finance, a hedge is a position established in one market in an attempt to offset exposure to the price risk of an equal but opposite obligation or position in another market u2014 usually, but not always, in the context of one's commercial activity. Hedging is a strategy designed to minimize exposure to such business risks as a sharp contraction in demand for one's inventory, while still allowing the business to profit from producing and maintaining that inventory.
Fair Value Hedge
Fair value hedges primarily relate to fixed-interest balance sheet items (eg receivables, equities or securities), which are hedged against market ...
Cash flow hedge
A cash flow hedge is a hedge of the exposure to the variability of cash flow that
- is attributable to a particular risk associated with a recognized asset or liability. Such as all or some future interest payments on variable rate debt or a highly probable forecast transaction and
- could affect profit or loss
Cash flow hedges are primarily taken to mean hedges against the risk associated with future interest payments from a variable-interest balance sheet transaction by means of a swap. They are measured at their fair values.
check the below link for more details
http://www.attuariale.com/ias39.php?language=English
hope this helps
regards,
radhika -
Hi,
I will explain one example contains the process sell/buy options. Please go through this and advise me on the same
EUR/USD
Spot price : 1.40
Strike Price: 1.45
a) SellCall
b) SellPut
c) BuyCall
d) BuyPut
Which options will exercise (a,b,c,d)
1. If the current price is 1.40
2. If the current price is 1.45
3. If the current price is 1.50
and what is the reason for exercising those optins???
Regards
BlessyHi Blessy,
A very nice question. maybe the same can be executed also in the system.
Best regards!
Sandip -
Hi,
Please explain what is Spot, Strike, Forward prices with examples???
Regards
BlessyHi,
Spot is nothing but the current price, while stike price is the price which you are going to fix in your option. Suppose you have an option between USD/EUR, then exchange rate price is spot price while the price on the exercise date for this option is the strike price. Ultimately strike price will be price at which this option will be exercised.
Future price is nothing but the price in the case of futures contract. A future contract is an obligation for both buyer and seller i.e one has to sell and the other has to buy. While in the case of option, either the buyer or the seller wil have the option to buy or sell.
Regards,
Ravi -
Treasury&RiskMgmt-Transaction Manager- Money market
Hello Colleague,
In the creation of Money market - Fixed Term Deposit - investment , one select box for Capitalize interest is present
What does this capitalize interest means?? why it is in the Money market?Hi,
It depends on country you are using.
if you check capitalize interest, interest would be added to your deposit account i.e. asset account. Then it means that interest amount has also been added to the asset and hence we will not pay tax on interest amount. This is generally done, when you invest back the money which you got from deposit including interest. Then since you are investing, you won't pay tax for it i.e you are using the money.
If you have not checked the capitalize interest, then you will get the interest amount to your bank or cash and hence it is a revenue, thus you will have to pay tax for interest amount alone depeding on the amount and also the country.
P.S: If the question is answered kindly close the question.
Regards,
Ravi
Edited by: Ravishankar Ramamurthy on Jul 8, 2009 5:57 PM -
Treasury - Contract Expired - Any follow-up activities
We had our first treasury contract mature in SAP since we went live and I'm not sure if any follow-up activities need to be done. The contract is in status 'settlement.' Is there a way to get the contract into an expired/matured type status?
HI
The settlement stage is the last stage of a transaction based on it's processing category.
You can define your own processing steps ( unfortunately ))
Malolan R
SAP Treasury -
Interest Rate Instruments in Treasury
Hello SAP Gurus
We are using SAP Treasury Product (55A u2013 Interest Rate Instrument) to meet one of our business requirements. We are creating Investment deal/contract with a variable interest. We are also maintaining the Interest Rate Values in transaction code JBIRM on daily basis.
The business requirement is here that they want to calculate the interest value on daily as per rate maintained in transaction code JBIRM and pay on Monthly Basis.
If I am selecting the frequency monthly in Interest Structure Tab and executing transaction code TJ05 to update the interest rate in the deal/Contract. It is not updating correctly. It is taking only one interest rate not alls.
If I set frequency Daily in Interest Structure Tab and executing transaction code TJ05 to update the interest rate in the deal/Contract. It is updating correctly. But the Issue is here that than it is creating interest accounting entry on daily basis. We do not want to create Interest Entry on Daily.
Could you please help me to update the interest rate on daily basis and calculate the Interest Value accordingly and ay on Monthly?
Thanks and Regards,
Amit Kumar JainTo calculate interest based on a daily rate, but only post interest monthly, you have to maintain the interest and interest rate adjustment conditions with different frequencies.
In the deal, click on the conditions button. You should see a condition 1200 - Nominal interest and because you have used a variable interest rate, you should also see a condition 1210 - Interest rate adjustment. To post interest monthly, you need to set the Nominal interest (1200) condition to Regular update with Frequency of 1 Month. To enter daily interest rates, you need to also set the Interest rate adustment (1210) to Regular update, however the frequency should be 1 Calendar day.
In addition, if you will not have interest rates for weekends and banking holidays, you can set the calendar rule to next or previous working day to and enter a factory calendar that has been configured with weekends and banking holidays as non-working days. Whether you select next or previous working day depends on how the bank calculates interest for the weekends/holidays. For example, if the bank uses the rate from Friday to calculate interest for Saturday and Sunday, you would select previous working day. If however, it uses Monday to calculate the interest, then you would select next working day.
I'm not clear on the issue you are experiencing with TJ05. Can you explain furthe rwhat you mean when you say that it is taking only one interest rate, not all?
Regards,
Amit -
Error while creating position indicator in Treasury
Hi,
I got an error message "No differentiation was defined in Customizing for this position" while creating position indicator in Treasury Mgt for Securities ( TPM55A).
Message no. TPM_TRL098
Please help me on this issue. Very urgent.
Thanks & Regards,
Shaik.AHI,
I have resolved the issue.
Maintained Sec.Acct.
FSCM-Treasury & Risk Mgt-Transaction Mgr-General Settings-Accounting-Settings for position Mgt-Define and Assign Differentiations
Regards,
Shaik.A
Edited by: shaik A on Mar 31, 2008 1:14 PM -
WS20000263 Workflow configuration in Treasury (Business partner approval)
Hi Experts,
Currently we are doing an SAP Upgrade from 46C to ECC 6.0 (Enh. 4) and in Treasury we cannot solve a problem. There is a workflow (id: WS20000263) which is used in case when the BP is created or changed. This workflow was used in 46C, but in ECC 6.0 this is changed (in the new system the BP is managed in a different way as it was in 46C - Central Business Partner).
The problem is that the workflow is not working: I am not even able to do the proper configuration. There are some contradictory parts in SAP help which confuse me! (i.e.: in SPRO in "Active Release" config point, it says "activate the release object CBP SAP Business Partner". But the table - which contains this configuration point - is filltered for "ZBP" object, which means i can activate only the "ZBP" object and never the "CBP" object. The other point is that I cannot add "CBP" value in a "proper" way...)
I hope any of you faced with this workflow configuration and help me out or at least give me some advices.
Thanks in advance for your help!
Best Regards,
AttilaHello Atrtila ,
Good Morning.
can you please tell me how your problem is solved.i am facing exactly the same issue in our system.exactly same thing.workflow release is getting triggered on changing any business partner role but not triggering at the time of creating a new line in business partner role .
please help.
Vijay Agarwal. -
Letter of Credit-Treasury ECC-6.0
Dear Gurus,
I am am new to SAP treasury and our client has given some basic requirements regarding LC.Excerpts of the mail are as follows:
Opening of trade facilities (L/C, T/T, DP &DA) with the banks
All functionailities should have following features;
- Link in SAP from procurement's P/O or any formed requirements of raw materials and spare parts
- Traceable Reference of L/C or trade documents which may divide into multiple shipments
- Automatic and dynamic update (ie. L/C, forward contract due date) in conjunction with report call date
- Status report (ie. hedged, open position)
- Weekly Planning mode to input and adjust import material plan and revision
- Flexibility to manage on standalone and group basis
Can anybody please help with the basic steps and process for configuration regarding the product types and a broadline process.I know that I have to use Money Market Product types.
Regards
RajuHi,
Letter of credit is form of payment guarantee which can be handled in AR/SD Credit Management/Risk Management.
Sales and Distribution
Basic Functions
Credit Management/Risk Management
Receivables Risk Management
Define Forms Of Payment Guarantee
There won't be a letter of credit created in Treasury.
Hedging, open positions (exposure) can be handled under Treasury and Risk Management; tcode THMEX.
Manish -
Exchg rate from new exch type X is not picked up in Treasury transactions
Dear All,
I am maintaining a new exchange rate type for treasury transactions called "x". I have made all the settings required for this. Following is the series of steps configured to pick up the exchange rate maintained for type "x" for a Interest rate instrument foreign currency transaction.
*Genaral Settings*
1) Define exchange Rate(E Rt) type 'X'.
2) Define translation ratios for curr translation
X usd inr 1:1
X inr usd 1:1
3) Define new doc type "ZF" with exch rate type "X"
4) Define Exch rate calculation indicator
02 X X
*Treasury settings*
5) Define company code additional data
Rate Calculated 02
Rate type(Debit) X
Rate type(crdit) X
6) Assignment of valuation areas to accounting codes
ER type X
7) Define account determination
Doctype "ZF" assigned to the relevant posting specs
Document Splitting
8) Classify doc types for doc splitting
ZF 0000 0001
9) Exch Rate of "X"
X 01.01.2006 usd 47.36 inr
after maintaining all these details I am trying to post an FC transactio using tcode TBB1. Everything is fine no errors nothing I can post the document also but THE EXCHANGE RATE MAINTAINED FOR TYPE X IS NOT PICKED INSTEAD RATE FOR TYPE M IS PICKED UP".
please advise if i missed something. I am not able to trace why the SAP is picking rate from type M when I made settings to pick the rate from type X.
Rgds
KomalHi
Generally for posting FI documents (which is what this T Code does) , M alone is used which is the standard SAP system functionality. For other purposes like valuation, translation, etc. we can have different exchange rate types.
Jayaram
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