Question
Consider a 12-month forward contract written on USDTRY. The current spot price is 3.5722 TRY per USD. 12-month continuously compounded borrowing and lending risk free
Consider a 12-month forward contract written on USDTRY. The current spot price is 3.5722 TRY per USD. 12-month continuously compounded borrowing and lending risk free interest rates are 1.562% and 11.952% per annum for USD and TRY, respectively. What is the correct price of this forward contract at the inception?
Round to at least 4 decimals unless otherwise stated. All the answers should be numeric. You can only use . for separating decimals, and for negative results. Do not use any other alphanumeric characters, including , for separating thousands or + for positive results.
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