Answer: 95

## Explanation To calculate the forward points, we use the interest rate parity formula: \[\text{Forward Points} = \text{Spot Rate} \times \left(\frac{(1 + r_{\text{YYY}} \times \frac{t}{360})}{(1 + r_{\text{XXX}} \times \frac{t}{360})} - 1\right) \times 10,000\] Where: - Spot Rate = 1.3000 - r_YYY = 4% = 0.04 - r_XXX = 1% = 0.01 - t = 3 months = 90 days \[\text{Forward Points} = 1.3000 \times \left(\frac{(1 + 0.04 \times \frac{90}{360})}{(1 + 0.01 \times \frac{90}{360})} - 1\right) \times 10,000\] \[= 1.3000 \times \left(\frac{(1 + 0.01)}{(1 + 0.0025)} - 1\right) \times 10,000\] \[= 1.3000 \times \left(\frac{1.01}{1.0025} - 1\right) \times 10,000\] \[= 1.3000 \times (1.00748 - 1) \times 10,000\] \[= 1.3000 \times 0.00748 \times 10,000\] \[= 97.24\] However, since YYY has a higher interest rate than XXX, the forward rate should be at a discount (lower than spot), so we need to reverse the calculation: \[\text{Forward Points} = \text{Spot Rate} \times \left(\frac{(1 + r_{\text{XXX}} \times \frac{t}{360})}{(1 + r_{\text{YYY}} \times \frac{t}{360})} - 1\right) \times 10,000\] \[= 1.3000 \times \left(\frac{(1 + 0.01 \times \frac{90}{360})}{(1 + 0.04 \times \frac{90}{360})} - 1\right) \times 10,000\] \[= 1.3000 \times \left(\frac{1.0025}{1.01} - 1\right) \times 10,000\] \[= 1.3000 \times (0.99257 - 1) \times 10,000\] \[= 1.3000 \times (-0.00743) \times 10,000\] \[= -96.59\] Taking the absolute value and rounding to the nearest whole number gives approximately 97 points. Among the given options, 95 is the closest to this calculation. **Therefore, the correct answer is D (95).**

Author: LeetQuiz Editorial Team