Answer: B

Step-by-step calculation:

1. Given information:

   • EURXYZ spot rate = 1.3344
   • Two-year forward points = +290 pips (basis points)
   • Therefore: EURXYZ two-year forward rate = 1.3344 + 0.0290 = 1.3634

2. Invert to get XYZEUR (euro as quote currency):

   • XYZEUR spot rate = 1/1.3344 = 0.7494 EUR
   • XYZEUR two-year forward rate = 1/1.3634 = 0.7335 EUR

3. Calculate the change (forward points) for XYZEUR:

   • Forward points = 0.7335 - 0.7494 = -0.0159
   • In basis points: -0.0159 / 0.7494 × 10,000 ≈ -212 basis points (using percentage method)
   • Or simply: 0.7335 - 0.7494 = -0.0159, which equals approximately -159.4 pips (expressed in pips where 1 pip = 0.0001, so -0.0159 = -159 pips)

4. Key insight: When you invert a currency pair quote, the sign of the forward points changes (positive becomes negative), and the magnitude changes because the base value differs. The forward points are additive in the original quote but the change becomes negative and proportionally larger in the inverted quote.

• Option (a) -446.3 is incorrect (too large in magnitude)
• Option (c) +290.0 is incorrect (this is the original forward points, not adjusted for inversion)
• Option (d) +327.7 is incorrect (sign is wrong)