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

B. 1.06398

C. 1.0794

A. 1.0645

B. 1.06398

C. 1.0794

Correct Answer: B

1.0717 x (1 - 0.72%) = 1.06398

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**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 |