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The €/spot exchange rate is 1.50/€ and the 90-day forward premium is 10 percent. Find the 90-day forward price.

User Pham
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Final answer:

To find the 90-day forward price, add the forward premium to the spot exchange rate.

Step-by-step explanation:

To find the 90-day forward price, you need to calculate the premium and add it to the current spot exchange rate. The forward premium is given as 10 percent. Since it's a premium, we add it to the spot exchange rate:

Forward Premium = Spot exchange rate * (Premium/100) = 1.50 * (10/100) = 0.15

Forward Price = Spot exchange rate + Forward Premium = 1.50 + 0.15 = 1.65

User Haim Evgi
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