If the Current Spot Exchange Rate on the Euro Is

question 24

Multiple Choice

If the current spot exchange rate on the Euro is $1.2812/€ and the two year risk free rate for borrowing in dollars is 3% and 4% for borrowing in Euros,what should be the two year $/€ forward exchange rate?

• A) 1.2689
• B) 1.2812
• C) 1.2567
• D) 1.2469

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Definitions:

Pointer Variable

A pointer variable is a variable that stores the memory address of another variable, enabling direct memory access and manipulation in programming.

Store Address

Relating to storing or saving a memory address in a programming context, often used in variables to reference locations.

Variable

An element of coding that represents a storage location paired with an associated symbolic name, which contains some known or unknown quantity or information, also called its value.