A French importer has entered into a contract under which it will require payment in GBP in one month. The company is co
Posted: Sat Feb 26, 2022 9:03 am
A French importer has entered into a contract under which it
will require payment in GBP in one month. The company is concerned
at its exposure to foreign exchange risk and decides to enter into
a forward exchange contract with its bank. Given the following
(simplified) data, calculate the forward rate offered by the bank
(round your answer to 4 decimal places and do not enter the three
character currency codes). Both countries use a 365-day year;
assume 30 day contract.
EUR/GBP (spot): 0.7660-69
One-month French interest rate: 4.45% p.a.
One-month UK interest rate: 3.55% p.a.
will require payment in GBP in one month. The company is concerned
at its exposure to foreign exchange risk and decides to enter into
a forward exchange contract with its bank. Given the following
(simplified) data, calculate the forward rate offered by the bank
(round your answer to 4 decimal places and do not enter the three
character currency codes). Both countries use a 365-day year;
assume 30 day contract.
EUR/GBP (spot): 0.7660-69
One-month French interest rate: 4.45% p.a.
One-month UK interest rate: 3.55% p.a.