The $/CD spot bid-ask rates are $0.7560-$0.7625.The 3-month forward points are 12-16.Determine the $/CD 3-month forward bid-ask rates.

Question

Quizplus · Accepted Answer

To calculate the forward bid-ask rates, we need to add the forward points to the spot bid-ask rates.

For the bid rate: 
Bid forward rate = Spot bid rate + Forward points 
Bid forward rate = 0.7560 + 16/10,000 
Bid forward rate = 0.7576

For the ask rate: 
Ask forward rate = Spot ask rate + Forward points 
Ask forward rate = 0.7625 + 16/10,000 
Ask forward rate = 0.7641

Therefore, the 3-month forward bid-ask rates are $0.7572-$0.7641, which is option B.

The $/CD Spot Bid-Ask Rates Are $0