FIN MCQ
FIN402 Chapter 9
Find the forward rate of foreign currency Y if the spot rate is $4.50, the domestic interest rate is 6 percent, the foreign interest rate is 7 percent, and the forward contract is for nine months. (The interest rates are continuously compounded.)
Find the forward rate of foreign currency Y if the spot rate is $4.50, the domestic interest rate is 6 percent, the foreign interest rate is 7 percent, and the forward contract is for nine months. (The interest rates are continuously compounded.)
Find the forward rate of foreign currency Y if the spot rate is $4.50, the domestic interest rate is 6 percent, the foreign interest rate is 7 percent, and the forward contract is for nine months. (The interest rates are continuously compounded.)
a. $4.458
b. $5.104
c. $4.468
d. $4.532
e. none of the above
Answer: C
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