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

Question

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] · Answer 1 · 2022-03-27T12:09:54+03:00

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.