Consider the following equation: S × [(Foreign Cash Flow) / (1 + r_FC] = (Forward Rate × Foreign Cash Flow) / (1 + r_$)
The term r_FC in this equation is ________.

Name: Consider the following equation: S × [(Foreign Cash Flow) / (1 + r FC ] = (Forward Rate × Foreign Cash Flow) / (1 + r $ ) The term r FC in this equation is ________.
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Question

Consider the following equation: S × [(Foreign Cash Flow) / (1 + r_FC] = (Forward Rate × Foreign Cash Flow) / (1 + r_$) The term r_FC in this equation is ________.

Quizplus · Accepted Answer

The term r_FC represents the foreign currency discount rate, which is used to discount the foreign cash flow back to its present value in the foreign currency.

Consider the Following Equation: S × [(Foreign Cash Flow)