Calculate the Forward Exchange Rate Using the Following Information

question 97

Multiple Choice

Calculate the forward exchange rate using the following information.Spot exchange rate is $1.45 for 1 Euro.The nominal interest rate in Canada is 6 percent and the nominal interest rate in Europe is 4%.

• A) 1.44
• B) 1.43
• C) 1.45
• D) 1.41
• E) 1.42

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Definitions:

Bond Amortization Schedule

A schedule that outlines the periodic reduction of the discount on bonds payable or the premium on bonds payable, along with the interest expense over the life of the bond.

Interest Paid

The amount paid over a period for borrowing funds or the cost incurred for the use of borrowed money.

Interest Expense

The cost incurred by an entity for borrowed funds, reflectively the interest payments due on any type of debt.

Face Value

The nominal value printed on a bill, bond, ticket, or other document, representing its value at issuance and/or redemption.