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The Theoretical Forward Rate Implied by the Interest Rates and Spot

Question 29

Multiple Choice

The theoretical forward rate implied by the interest rates and spot exchange rate can be expressed as ________.


A)
S=F(1iA1+iB) \mathrm{S}=\mathrm{F}\left(\frac{1-\mathrm{i}_{\mathrm{A}}}{1+\mathrm{i}_{\mathrm{B}}}\right)

B)
F=S(1+iA1iB) \mathrm{F}=\mathrm{S}\left(\frac{1+\mathrm{i}_{\mathrm{A}}}{1-\mathrm{i}_{\mathrm{B}}}\right)

C)
F=S(1+iA1+iB) F=S\left(\frac{1+i_{A}}{1+i_{B}}\right)

D)
F=S(1iA1iB) F=S\left(\frac{1-i_{A}}{1-i_{B}}\right)

Correct Answer:

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