Consider the following equation:
S ×
=
The term F in this equation is:

Question

Consider the following equation:
S × 
= 
The term F in this equation is:

Quizplus · Accepted Answer

The term S is the current spot exchange rate, and the equation involves a multiplication with a term that is a product of a number and a TB (time-based) code, indicating a future date. Therefore, the term on the right-hand side of the equation is a future spot exchange rate. Since the equation involves a multiplication between the current and future spot exchange rates, the missing term (F) must be the forward exchange rate.

Consider the Following Equation