Forward premium: State Bank of India has offered a spot rate quote on Indian rupees (Rs) of Rs. 42.47/$. The Indian rupee is quoted at a 30-day forward premium of 7.65 per cent against the dollar. What is the 30-day forward quote?

Question

Quizplus · Accepted Answer

The forward rate can be calculated using the formula: Forward Rate = Spot Rate * (1 + (Forward Premium/100) * (Days/360)). Here, Forward Rate = 42.47 * (1 + (7.65/100) * (30/360)) = Rs 42.7404/$.

Forward Premium: State Bank of India Has Offered a Spot