- CFA Exams
- CFA Level I Exam
- Topic 2. Economics
- Learning Module 8. Exchange Rate Calculations
- Subject 2. Forward Rate Calculations

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**CFA Practice Question**

Assume EUR:USD is 1.3146 and the three-month forward points are quoted as 28. The EUR:USD three-month forward rate is ______.

B. 1.3118

C. 1.3174

A. 1.5946

B. 1.3118

C. 1.3174

Correct Answer: C

1.3146 + 0.0028 = 1.3174

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**User Contributed Comments**
3

User |
Comment |
---|---|

maryprz14 |
FX market is a stupid game!!! apparently, no rule applies to it; 28 means .0028. So let's say EUR:USd rate is 1.31460 the would 28 mean 0.00028????? ahhhhhhhhhhhhhhh... I wanna shoot myself |

timkalt |
If you have the 4-digit quotation, you can just add the BP´s to the end. So, in this case 3146+28=3174. Therefore, c is correct. |

MathLoser |
1.3146 . That's 4dp 28/(10)^4 = 0.0028 1.3146 + 0.0028 = 1.3174 What about 1.314? That's only 3. So 28/(10)^3 = 0.028 ==> 1.314 + 0.028 = 1.342. Go on. |