Consider a 12-month forward contract written on USDTRY. The current spot price is 8.2900 TRY per USD.

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Consider a 12-month forward contract written on USDTRY. The current spot price is 8.2900 TRY per USD. 12-month continuously compounded borrowing and lending risk free interest rates are 1.572% and 18.942% per annum for USD and TRY, respectively.

What is the correct price of this forward contract at the inception?

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Introduction To Corporate Finance

ISBN: 9781118300763

3rd Edition

Authors: Laurence Booth, Sean Cleary

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Posted Date: Nov 02, 2023 01:04 AM

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Consider a 12-month forward contract written on USDTRY. The current spot price is 8.2900 TRY per USD.

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To calculate the correct price of a 12month forward contract on USDTRY you can use the interes... View the full answer

Introduction To Corporate Finance

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