The spot rate of euro is quoted at $1.29. The annualized forward premium on the euro is 10%. What is the 30-day forward rate of the euro?

Question

Quizplus · Accepted Answer

First, we need to calculate the 30-day forward premium on the euro by dividing the annualized forward premium by 360 (the number of days in a year).

30-day forward premium = 10% / 360 * 30 = 0.83%

Then, we can calculate the 30-day forward rate by adding the forward premium to the spot rate.

30-day forward rate = 1.29 + (1.29 * 0.0083) = 1.311

Therefore, the answer is B, $1.30.

The Spot Rate of Euro Is Quoted at $1