Assume That the Annualized Forward Premium Is 1 Percent and That

question 42

Multiple Choice

Assume that the annualized forward premium is 1 percent and that the spot rate is 2.00 $/pound.What would the one-year forward rate have to be?

• A) 1.76
• B) 1.98
• C) 2.02
• D) 2.24

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