Reddit

Q.4181 Suppose the market USD/EUR spot exchange rate is 1.3536 EUR with a one-year forward rate of 1.3280 EUR. The market consists of a risk-free rate of 4% USD and 6% EUR, respectively. Calculate the ratio of forward rate to spot rate. | Financial Risk Manager Part 2 Quiz - LeetQuiz

Explanation:

The ratio of forward to spot rate = $\frac{F}{S} = \frac{1.3280}{1.3536} = 0.9811$

Comments (0)

No comments yet.

Financial Risk Manager Part 2

Get started today

Comments (0)

Get started today

Q.4181 Suppose the market USD/EUR spot exchange rate is 1.3536 EUR with a one-year forward rate of 1.3280 EUR. The market consists of a risk-free rate of 4% USD and 6% EUR, respectively. Calculate the ratio of forward rate to spot rate.

Comments (0)