- CFA Exams
- CFA Level I Exam
- Topic 2. Economics
- Learning Module 8. Exchange Rate Calculations
- Subject 2. Forward Rate Calculations
CFA Practice Question
If the spot Japanese yen were sold at $0.007960, whereas the 180-day forward yen were priced at $0.008184, what would be the annualized forward premium?
A. 5.63%
B. 5.47%
C. 2.82%
Explanation: Forward premium annualized = [(0.008184 -0.007960)/0.007960] x 360/180 = 0.0563 = 5.63%
User Contributed Comments 1
| User | Comment |
|---|---|
| janis36 | Should we ignore compounding? |