Question
The U.S.- based firm Fishing Well is negotiating with its bankers to enter into a three- month EUR forward contract. The firm has hired you
The U.S.- based firm Fishing Well is negotiating with its bankers to enter into a three- month EUR forward contract. The firm has hired you to provide a second opinion on the forward quote. The bank is currently quoting the three-month forward rate at USD 1.3642. You will consider the following information to answer this question. The spot rate is USD 1.3591. The interest rates in the United States and the Eurozone are 3 percent and 1.5 percent, respectively. Assume annual compounding.
What is your forecast for the forward rate? (use x.xxxxx)
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Cima Official Exam Practice Kit Fundamentals Of Management Accounting Cima Certificate In Business Accounting 2006 Syllabus
Authors: Walter Allan
2nd Edition
0750687177, 978-0750687171
