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What will be the forward rate

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Reference no: EM132973519

Given the following information for a 90-day contract:

Pesos FC

Value Today . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,750 5,000

Interest Rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4% 7%

3 months interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37.50 87.50

Value in 3 months . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ?? ??

The spot rate today is 1 FC = .75 . . . . . . . . . . . . . . . . .

Problem 1: What will be the forward rate?

Reference no: EM132973519

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