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