A forward contract on an exchange rate obliges the holder to buy the face value F in foreign currency, at the forward rate k, at the expiry time T = 2. The exchange rate is X(O) at node (0,0). Show that, in a two-step model (assuming constant interest rates), the forward rate is: 2 k = Rd Rf X(0) where Rd is the return over one time-step in domestic currency, and Rp is the return over one time- step in foreign currency. A forward contract on an exchange rate obliges the holder to buy the face value F in foreign currency, at the forward rate k, at the expiry time T = 2. The exchange rate is X(O) at node (0,0). Show that, in a two-step model (assuming constant interest rates), the forward rate is: 2 k = Rd Rf X(0) where Rd is the return over one time-step in domestic currency, and Rp is the return over one time- step in foreign currency