Forward Rate: John Travers Is Planning a Holiday to Thailand

question 53

Multiple Choice

Forward rate: John Travers is planning a holiday to Thailand but is concerned that the U.S. dollar will decline in value before he makes his trip. His travel agent has planned a trip for him for a total cost of 41,250 Thai baht. John plans to purchase the bahts forward and is given a dollar estimate of $1,247.17 based on the 30-day forward quote. What is the forward rate?

• A) THB41.2500/$
• B) THB33.0785/$
• C) $0.0242/THB
• D) $1.2471/THB

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