CFA Practice Question

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CFA Practice Question

Assume AUD:USD is 1.0717 and the one-month forward rate is quoted as -0.72%. The AUD:USD one-month forward rate is ______.

A. 1.0645
B. 1.06398
C. 1.0794
Correct Answer: B

1.0717 x (1 - 0.72%) = 1.06398

User Contributed Comments 4

User Comment
Omosewa Can someone please explain why this solution is different from that in question 2?
Maxfit This is based on a percentage change, whereas the one in question 2 is based on a 'point change'.
vatsal92 And in question 2 it's a negative value.
Kennyk11 Thank you Omosewa for asking that, thought the same thing :p
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