David Norton

I cannot seem to get to grips with the spread calculation. and wondering if anyone can help me, it maybe my calculator's settings I am not sure...please help!

eg

3(0.75 x 50 x 4,000,000/0.00025) 1/3 = £25,302.


When I enter this in my calculator I get = 6 x 10 to the power of 11.

Is it my calculator or me? If anyone knows could you please leave a step by step explanation how to input it on my calculator.


Thank you.

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johnfash

Hi mate, hope this helps.

I am assuming, based on your calc, that:

Transaction cost - 50
Variation in CF's - 4,000,000
Interest rate (daily) - 0.025% or 0.00025

I do not add it into the calculator at all together, but tackle it one bit at a time.

1st do the brackets, so (0.75 x 50 x 4,000,000)/0.00025

2nd square the answer by the power 1/3. On your calculator, you should have a button with the symbol "^", that button means to the power of. So, once you have your answer to the 1st bit, press ^ then "(1/3)".

Then times that answer by 3 to give your spread.

So, in the example above, I got:

Spread = 25,303

Sorry if it seems patronising but I sympothise with you as I had a lot of trouble with this calc to start off.

applelui

(0.75 x 50 x 4,000,000/0.00025) : 600000000000
((600000000000)1/3)= ans x 3 = 25,303

waqar siddiqui

are u talking about p4 or f9