If the spot CAD/USD rate is 1.1239 and the three month interest rates on CAD and USD are 0.75% and 0.4% annually respectively, then calculate the 3-month CAD/USD forward rate.
If the spot CAD/USD rate is 1.1239 and the three month interest rates on CAD and USD are 0.75% and 0.4% annually respectively, then calculate the 3-month CAD/USD forward rate.
Chapter4: Time Value Of Money
Section4.17: Amortized Loans
Problem 1ST
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If the spot CAD/USD rate is 1.1239 and the three month interest rates on CAD and USD are 0.75% and 0.4% annually respectively, then calculate the 3-month CAD/USD forward rate.
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