The market is quoting: 1-month (31-day) NOK 1.75¡ãk 3-month (91-day) NOK 2.05% What is the 1x3 rate in NOK?
A) 4.261%
B) 2.202%
C) 1.900%
D) 1.592%

Question

The market is quoting: 1-month (31-day) NOK     1.75¡ãk 3-month (91-day) NOK     2.05% What is the 1x3 rate in NOK?
A) 4.261%
B) 2.202%
C) 1.900%
D) 1.592%

Quizplus · Accepted Answer

To calculate the 1x3 rate in NOK, we need to use the formula: 
(1 + 91-day rate x 91/365) / (1 + 31-day rate x 31/365) - 1

Plugging in the given rates, we get: 
(1 + 0.0205 x 91/365) / (1 + 0.0175 x 31/365) - 1
= 1.00551585 / 1.0013726 - 1
= 0.00413325

Converting this to a percentage, we get: 
0.00413325 x 100 = 0.413325%

Therefore, the 1x3 rate in NOK is 2.05% + 0.413325% = 2.463325%. The closest answer option is B) 2.202%.

The Market Is Quoting: 1-Month (31-Day) NOK 1