John Travers is planning a holiday to Thailand but is concerned that the U.S. dollar will decline in value before he makes his trip. His travel agent has planned a trip for him for a total cost of 41,250 Thai baht. John plans to purchase the bahts forward and is given a dollar estimate of $1,247.17 based on the 30-day forward quote. What is the forward rate?

Question

Quizplus · Accepted Answer

To find the forward rate, we need to divide the total cost in Thai baht by the dollar estimate provided based on the 30-day forward quote:

Forward rate = Total cost in Thai baht / Dollar estimate

Forward rate = 41,250 THB / $1,247.17

Forward rate = 33.0749 THB/$

Therefore, the best choice is B, THB33.0749/$.

John Travers Is Planning a Holiday to Thailand but Is