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S0 = $1.2158/ S0 = 0.7378/$ S0 = $1.3554/ E (S1 (3-months)) = $1.2640/ F3-months = $1.1880/ Where: = euro; = British pound; E (
S0 = $1.2158/ S0 = 0.7378/$ S0 = $1.3554/ E (S1 (3-months)) = $1.2640/ F3-months = $1.1880/ Where: = euro; = British pound; E ( ) = Expected.
- Do you think there is anything off or not right about the three-month forward rate given above for the euro? If yes, what is off or wrong with it?
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