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Dahasolnce [82]
3 years ago
10

The $/CD spot bid-ask rates are $0.7560–$0.7625. The 3-month forward points are 12–16. Determine the $/CD 3-month forward bid-as

k rates. A. $0.7548–$0.7609 B. $0.7512–$0.7616 C. Cannot be determined with the information given. D. $0.7572–$0.7641
Business
1 answer:
mylen [45]3 years ago
5 0

Answer:

D. $0.7572–$0.7641

Explanation:

The forward BID rate is the rate at which the buyer is willing to buy or perform a transaction while the ASK rate is at which the seller is willing to sell at.

They are calculated by Adding or Subtracting the Basis Point(BPS).

Here BPS = 0.12% AND 0.16%.

Forward bid rate =$0.7560 + 0.0012 = $0.7572

Forward ask rate= $0.7625 +0.0016 = $0.7641.

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