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    Quiz 2

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    Uroona Malik
    This document provides the solution to a quiz question calculating the forward price of $100 using the formula: F0,T = e(rE - rD)T x (x0), where rE is the domestic interest rate of 2%, rD is the foreign interest rate of 5%, T is the time period of 0.25 years, and x0 is the initial exchange rate of $1 = 110 yen. Plugging these values into the formula results in a forward price of ¥10917.8086 for $100.

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    Quiz 2

    Uploaded by

    Uroona Malik
    15 views1 page
    This document provides the solution to a quiz question calculating the forward price of $100 using the formula: F0,T = e(rE - rD)T x (x0), where rE is the domestic interest rate of 2%, rD is the foreign interest rate of 5%, T is the time period of 0.25 years, and x0 is the initial exchange rate of $1 = 110 yen. Plugging these values into the formula results in a forward price of ¥10917.8086 for $100.

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    Quiz 2.docx

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    This document provides the solution to a quiz question calculating the forward price of $100 using the formula: F0,T = e(rE - rD)T x (x0), where rE is the domestic interest rate of 2%, rD is the foreign interest rate of 5%, T is the time period of 0.25 years, and x0 is the initial exchange rate of $1 = 110 yen. Plugging these values into the formula results in a forward price of ¥10917.8086 for $100.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    15 views1 page

    Quiz 2

    Uploaded by

    Uroona Malik
    This document provides the solution to a quiz question calculating the forward price of $100 using the formula: F0,T = e(rE - rD)T x (x0), where rE is the domestic interest rate of 2%, rD is the foreign interest rate of 5%, T is the time period of 0.25 years, and x0 is the initial exchange rate of $1 = 110 yen. Plugging these values into the formula results in a forward price of ¥10917.8086 for $100.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
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    Quiz 2

    Solution :-
    F0,T = e (r ¥ −r $ )T ×(x 0 )
    F0,T = e (0.02−0.05 )0.25 × 110¥ /$
    F0,T = 109.178
    forward price for $100 is (100 × 109.1781) = ¥ 10917.8086

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