Financial Risk Manager Part 2

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Explanation:

The correct answer is D.

F = S \times \frac{1 + r \times T}{1 + r^* \times T}

= 1.500 \left( \frac{1 + 0.012 \times \frac{180}{360}}{1 + 0.02 \times \frac{180}{360}} \right)

\approx 1.49405

Alternatively,

F = S \times \left( \frac{1 + r}{1 + r^*} \right)^T

= 1.500 \left[ \frac{1 + 0.012}{1 + 0.02} \right]^{\frac{180}{360}}

\approx 1.494106

Q.4193 Assume that the GBP/USD spot exchange rate is 1.500 (i.e., 1 GBP = 1.500 USD). Further assume that the 180-day USD LIBOR rate stands at 1.2%, and the 180-day GBP LIBOR rate is 2.0%. Compute the 180-day forward GBP/USD exchange rate.

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Last updated: July 5, 2026 at 07:08

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