The Forward Points Are Calculated Using

question 289

Multiple Choice

The forward points are calculated using:

• A) The level of interest rates in the base currency
• B) The level of interest rates in the quoted currency
• C) The interest rates in the two currencies
• D) Your expectations of the future spot rate

---

Definitions:

Yankee Bonds

Bonds issued by foreign entities in the U.S. market, denominated in U.S. dollars, to raise capital from American investors.

Samurai Bonds

Bonds issued in Japan by foreign entities, denominated in Japanese yen.

Synthetically Created

Created or manufactured using a combination of elements and processes to replicate or improve upon a natural product or financial instrument.

Zero-Coupon Bonds

Bonds that do not pay periodic interest payments and are issued at a deep discount, maturing at face value.